Credit card offers are enticing to college students. During a time when your bank account and stomach are equally empty, you’ll take any opportunity to alleviate the stress caused by a lack of funds. But when something seems too good to be true, there’s almost always a catch. In many cases, college kids fail to recognize the repercussions of misusing their credit cards.
If you’re considering applying for a credit card, it’s important that you read the fine print. In addition to the amount of money you’ll spend, there will be numerous fees that could cause you to fall into insurmountable debt if you’re not careful. Know the finance charge, which is a percentage of interest calculated based on the amount of money you borrowed. For example, if you spend $500 on your card and there’s a 10 percent finance charge, you’ll owe $550. If you miss a payment deadline, expect a late payment fee. Some credit card companies charge a yearly fee simply for their services. If these charges add up and become too much to handle, your credit history will be adversely affected. High debt and missed payments will result in a weak credit score, which may hamper your ability to make big purchases – like houses and cars – in the future.
After you decide which one to use, limit your spending habits. Only make purchases you need – like food, class supplies, gas – and repay the debt each month so that none remains. Avoid the temptation of picking up your friends’ bar tabs or spontaneously purchasing an attractive pair of shoes. If you can afford to buy something that’s pricey, use your debit card. Under normal circumstances, your credit card is best used during emergencies. If you don’t have any money left in your bank account and payday is a few days away, use it to buy groceries for that time period. If you’ve lost your debit card, use your credit card as a temporary means to get by. Credit cards can be helpful if used appropriately, but keep in mind there’s a reason why you’ve received so many offers; credit card companies prey on the ignorance of young adults. If you become a victim, you can only blame yourself.