Why do so many college students avoid credit cards even when there is clear incentive to do so?
Here’s what I hear all the time: “People have always warned me that credit cards can cause lots of financial problems, and I never really needed to borrow any money, so I never got one. Besides, my parents taught me that debt is bad.”
It’s true that credit cards get some people in trouble, but it’s also true that a healthy relationship with credit will pay off big time: Students with good credit are eligible for the best medical school loans. (“Do you qualify for the best medical school student loans?”)
You can easily avoid all of the credit card “horror stories” if you know how to avoid credit trouble and how to identify cards that have favorable terms for your situation.
Why Some Students Get Into Credit Card Trouble:
- Misreading the bill, forgetting to pay because of inconvenient billing cycles
- Quickly amassing debt due to high interest rates and irresponsible spending
- Using expensive features like cash advances without understanding the consequences
- Overspending, irresponsible purchases
The Easiest Way to Avoid Credit Card Trouble
- Don’t overspend: Only carry a credit card balance if it’s for an important purchase (laptop, school books) and if your card has a low interest rate (APR)
- Set a convenient billing cycle: Change your billing cycle to a time most convenient for you. If you get paid on the 1st Monday of each month, set your billing cycle so that your credit card bill comes a day or two after your paycheck. That way you’ll have enough money to make an immediate credit card payment.
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