Creating A Credit History
Applying for a college student credit card is one of the best ways to developing a positive credit history while in college. Having good credit when you graduate will only help you in your search of getting a job, apartment and insurance. Getting approval for any type of loan or credit will also be easier when you have already established credit.
Establishing credit is very important to do as soon as the opportunity is given to you. Once you are in your senior year in high school you will probably start getting advertisements in the mail for college student credit cards. Do not just throw them away. Look at the offers and see what they can do for you. Realizing they know as a very young adult you have probably not established any credit, they are still willing to do so and take a chance on you. They have a thought process of, if I am the one to give them credit and they are successful with it, they will be loyal to me as a credit card company because I gave them there first chance. This is a proven thought process.
When applying for a student credit card they will run your credit, but at the same time a lack of credit or very minimal credit history is not going to hurt your. You will be approved for that new student credit card. Now you have the opportunity to prove yourself and treat that credit right. The benefits of having good credit as mentioned above are a job, an apartment, lower cost on insurance and approval for loans and additional credit. Now is your chance to show what you are worthy and do it right.
By making the payments on time every single month and paying more than the minimum amount due you will be increasing your credit score. If you run you student credit card to the limit, did you know this will actually hurt your score? If you are given a certain amount of credit and you are generally maxed out to it, it says to them you do not know how to handle the credit or your financial situation is not enough to handle the credit. Typically never using more than 40% of the credit given you is a good number to stay at. And depending on how much of that you use you can generally be able to pay it off every month. This will continue to increase your credit score.
Knowing the do’s and don’ts of a first credit card is important to stay in the good graces of a credit card company. One mistake can be very costly in late fees and over limit fees. Once this happens it is pretty much down hill from there. Generally a college student credit card will come with free online advice. Use it. Go to those websites and see what they have to say. They will have great pointers and advise for you. If used properly you financial future will be a great one for you.
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Student credit cards.com @ December 26, 2008