If you have a credit card in college, odds are it’s your first one. Congratulations! You are on the way to building a credit history. That said, if you have never had a credit card before, you need to understand that you’re opening yourself up to a world of hurt if you don’t treat it with a little respect. The credit card mistakes you make in college will stay with you long after graduation, so read this list of five that are easy to avoid.
Not Paying Bills On Time
This is a really good way to waste money on interest payments and to torpedo your credit score right out of the gate. If you don’t pay off your balance in its entirety, on time, every month, you will pay late fees and accrue interest. Fixing a bad credit score is not easy. Frankly, there’s really no reason you need a card with a limit that’s higher than a few hundred. College isn’t the time for major purchases, so don’t get a credit card that will convince you to.
Getting Multiple Cards
If you do not have a very high limit, there is probably a reason. Your bank, for whatever reason, did not think that you had a high enough credit score to warrant a high limit. This means they do not think you’re capable of paying off anything more than a few hundred dollars a month. They are probably right. If you get multiple cards to increase the limit, you are going to get yourself into trouble when you inevitably overextend yourself.
Credit cards are not free money. It is nice to be in college and have your first taste of real freedom, but do not let that translate into a spending spree to spruce up your dorm room. All the money you spend you will have to pay back, possibly with interest. Treat the card like cash and only use it if you know 100% that you will be able to pay off the balance at the end of the month. If you’re like other students, you’re probably also carrying student loan debt, and that’s going to come back to haunt you, too. Don’t add to the pile unnecessarily.
Not Updating Your Account After Graduation
Once you’ve left college, you can probably get your card on different terms. Whether you went to Brandeis University or just finished a master’s in music education online, you aren’t a student anymore. That changes things for your bank. They may agree to up your limit or give you a different interest rate. Also, practically, they need to know where you live so they can send you important stuff like bills and replacement cards.
Not Having a Credit Card At All
While credit cards in college are definitely things that can get you into trouble, you should consider having one. You need to build up a credit history at some point, and having a credit card is the fastest, easiest way to do that when you’re young. Many people get one, put a few small purchases on it and pay it off at the end of the month just to build up their credit. It’s not a bad strategy if you have the self-control to do it.