Going to college is all about learning lessons, but we all know that many of the most significant pieces of knowledge we acquire during our four years on campus do not come from the classroom. Pretzels and diet soda, for example. Coke does not constitute a balanced diet; laundry should be done more than once a month and hanging out all night before a midterm does not guarantee straight A’s. All of these are crucial life lessons that no professor will ever teach you.
Unfortunately, another critical set of skills that you will almost certainly not master in any college course is how to manage your money. No graduate student will give you a grade based on how effectively you manage your first credit card. This is just another of those lessons that many of us have to learn the hard way.
Fortunately, if you approach your first credit card with your eyes wide open, you won’t make any of the unpleasant money blunders that many of your friends will face well into their twenties.
Too many cards
Credit card firms have been prohibited from actively marketing to college students since the adoption of the CARD Act in 2009. This hasn’t prevented many college students from accepting every credit card offer that comes their way (think retail credit cards, balance transfer cards, etc.).
If you’re just getting started with credit card management, your best chance is to choose a card that meets your needs and remain with it for a few years. This will allow you to practise developing excellent credit habits such as managing spending, paying payments on time, and staying out of debt without the stress of juggling many cards.
“I’ll pay for it later” attitude
When you’re young and studying hard, it’s easy to imagine a future where you’re making a lot of money doing something you enjoy. This makes it appear logical to load up your credit card with items you “need” right now. You’re going to be able to pay it off eventually, right?
No, not always. Recent college grads have had a difficult time finding jobs, so don’t expect to quickly move into a career that pays well enough to cover all of your bills plus a large credit card debt. The greatest thing to do with your card is to spend sensibly – only charge what you can pay off within a month, no matter how much of a big shot you think you’ll turn out to be.
College is a hectic period — you have classes, work, and spend time with your friends. It’s easy to lose track of the minor nuances.
But don’t make your credit card bill one of them. Failure to pay your credit card payments on time can drastically harm your credit score, and entering adulthood with less-than-perfect credit will make it difficult to obtain a home or auto loan. This is why you should mark your calendar with the due date of your credit card payment and be sure you pay it on time and in full every month. Your future self will appreciate your foresight!