Taking Charge of Your Credit Record
Your credit record (or history) will stay with you wherever you go. Future loans, student credit card accounts, employment, and even housing will all require a clean credit record. To start creating your good credit, first take a look at some basic credit facts.
Then you will see how to keep a clean credit history; establish strong credit protection; and stay out of any credit trouble.
Manage your money the right way from the start.
• Study your student credit card agreement
• Use your credit wisely
• Know your credit card limit
• When possible pay off your balance within the grace period
• Always make more than the minimum payment
• Pay on time every time
• Keep in touch
• Remember: credit counts for loans as well
Study Your Student Credit Card Agreement
Note the grace period, annual fees, cash advance fees, finance charges, as well as the annual percentage rate (APR). If you do plan to carry a balance on your account, shop around for a lower APR, even if it does mean paying a higher annual card holder fee.
Your Student Credit Card Statement
Using your credit wisely
Always keep track of your current purchases. Try to avoid large impulse buys. Do not use a cash advance to cover your normal daily expenses. In addition, remember the 20/10 rule: you should never borrow more than twenty percent of your annual net income; and you should never let your monthly debt payments become more than ten percent of your monthly net income.
Knowing Your Student Credit Card Limit
Exceeding your student credit card limit is usually considered a violation of your account agreement and can result in some additional fees or penalties, or the freezing and or the cancellation of your account.
Paying Off Your Balance Within The Grace Period
For most student credit cards, you can avoid any finance charges by paying off your total balance within an established grace period. It is kind of like an interest free loan for up to thirty days: purchases that are paid off during the current billing period do not accrue interest.
Making More Than The Minimum Payment
If you cannot pay off your total balance each month, then at the very least, try to pay more than the minimum required payment. Otherwise, you will end up paying more than the original purchase (based on payback time and interest rate).
Paying On Time, Every Time
Make sure you get your payment in by the due date to avoid any late fees and possible credit damage.
Keeping In Touch
If you change your name, address, or job, immediately notify your lending institution. You do not want to risk any late payments. It is also important to contact your lender if you cannot make a payment on your account for any reason. They just may be able to arrange special payment options that will help you avoid any credit problems.
Remember, Credit Counts For Loans As Well
Financial institutions will evaluate you based on the “3 Cs“, character (credit history); capital (assets that can be used as collateral); and capacity (your ability to handle the added debt based on your current income, debt, and expenses).
Student credit cards.com @ October 16, 2008