As a college student, it can be very easy to fall pretty deep into credit card debt. You have so many expenses and so many responsibilities each day that it can be very difficult to manage all of your finances all by yourself. If you are studying at Vermont Law, you probably have a student loan that you’re living off of, but you probably have a credit card as well.
As dependent as you may be on credit while a full time student, you want to be sure you know just how deep a whole you’re digging yourself. Here is how to avoid credit card debt in college.
Don’t Open Any Cards You Don’t Need
When you’re in college, the credit companies are going to be out for you like a hound in the woods. This is because college students make credit card companies a lot of money in fees and interest payments. College students are perpetually broke, don’t have great money management skills, and for some, their parents will eventually help them pay off all of the interest that built up while they were avoiding telling their parents just how deep they dug themselves.
These credit card companies will post up outside of sandwich shops and bookstores offering you a free sandwich or t-shirt if you apply for a credit card. Don’t be tempted by these freebies – if you see an offer that looks too good to be true, it is!
Stay Under 20% of Your Limit
If you do have a credit card while you’re in college, be sure you know your limit. Some people think that if their limit is $500 then they can spend $500. Unfortunately, if you spend more than 20% of your credit limit ($100), your credit score will be negatively affected.
So be sure to keep your spending on your credit card to a minimum, both so that you can ensure that you can pay it off each month, and also so that you can keep a healthy credit score. If you don’t pay off your credit card bill in full each month, you will start to pay a lot of money in interest, and your credit score will really suffer. Just make sure you don’t spend any money that you can’t pay back by the end of the month.
Always Check Your Statements
Each month you are going to get a credit statement, either in the mail or in your email box. Most college students move around pretty frequently, so it’s best for you to have your statements sent via email, and make sure that they are not going to your junk mail.
If you forget to make a payment, even if it’s only for $5, it will have a negative effect on your credit score and a hefty late fee to pay. That’s why it’s important to always check your statement and pay it off as soon as you can. If you always make the minimum payment, then you can probably count on making that payment for the rest of your life. So be realistic about how much you can afford to spend on credit.