Youve just peeled your very first student credit card off the acceptance letter, shiny and clean and all yours. It comes with all kinds of incentives to use it: rebates on gas, cash back on purchases at the right stores, maybe even a points system that can add up to free checks in the mail. Isnt it great to have a brand new card? Why not take your student credit cards on a spending spree right away?
Before you start taking advantage of all your cards great new features, stop and think. According to a federal report, the average student in New York state has four credit cards and has $3,173 in credit card debt. Thats in addition to debt from their college loans, and is probably accruing interest at a higher rate than the national average. Its a heavy load of debt to carry when youre new to the full time workforce and still looking for a job in your field. And its an easy burden to pick up. $3,173 is barely $793 a year. Thats $66 a month or $15.25 a week. Buy a pair of jeans or a new pair of sneakers, charge a few pizzas, and youve added that much to the debt youll be paying off for years to come.
How can you avoid this? Use student credit credit cards sensibly. Use these rules as a guide:
* Pay off all or most of your balance each month. You do need to use your credit card to build your credit history. You dont need to carry a balance.
* Charge only things you really need. Credit card companies encourage you to think of credit as play money, but youll need to pay for your play eventually. Charge only when you truly need an item and you know youll be able to pay it off shortly.
* Dont let the promise of rebates or points sway you to charge more. Its tempting to spend a few more dollars so youll earn enough for a rebate check, but the interest youll pay will cost you far more than the rebate check is worth. (Thats why credit card companies make money on rewards programs.)
* Avoid extra fees by paying your credit card bills on time every month. Between the average late fee of $35 and the way credit card companies jack up your interest rate when you miss payments, you can accrue hefty extra debt just by not paying on time. Dont start down that spiral! If you have trouble remembering to pay your bills on time, setting up automatic payments can be a credit saver.
Use your student credit cards wisely, and youll leave college with good credit and no credit card debt. That will make your life easier as you rent an apartment or buy a house, lease a car, and establish yourself after college.

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by: barrywaters
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