Common Credit Card Mistakes made by College Students
This article will teach you the common mistakes that students make with their credit cards, so that you can avoid them, and what to do if you already got in trouble.
1: Taking the first offer – When you are a student, you will most likely receive a lot of offers from credit card companies. Most people would sign up at the first offer they get because they seem to promise low rates and other things that you can’t resist. But if you read through their terms, you will find that most of their rates are actually higher than what they advertised.
Make sure to read the full terms and conditions when signing up and make sure to compare companies instead of choosing the first offer that sounds good.
2: Not paying the bills- Remember to pay your credit card bills! If you forget this, you will not only get an extra fee which can range from $30 to $50, but you will also get a “Bad costumer” mark that will follow you around for the next few years.
3: Drinking up the limits – Saturday night might be a nice time to go party at the city with your friends, but leave your credit card at home. You never know what you will end up using it for, and there are a lot of cases of people drinking up some of their limits on their credit card with their friends. Remember that 15% in interest is a lot.
4: Avoiding the bills – When the bills starts to get bigger, don’t try to avoid the fact that they are there. Use the money you would have spent on an awesome hoodie or a pair of jeans to pay your bills instead; it will be way cheaper for you like that.
5: Spending too much – Of course, this is a classic mistake. Keep your expenses low. Calculate how much you can spend and how much you can pay back BEFORE you buy anything. The money you owe adds up rather quickly, and you don’t want to be stuck with having debts when you’re in your 30’s.
What to do if you get in trouble:
So now you got into trouble. Your debts are piling up, increasing every month. Having reached this point is in itself a big mistake but by doing the below you could avoid more mistakes!
1: Stop spending – Of course, this is a must. Stop eating out at lunch, buy a bag of discount bread at the supermarket and make your own lunch. Stop buying luxury stuff. Spend $100 instead of $200 where possible. If you got an internet connection, get a slower one maybe. Do savings where possible, they add up in the end.
2: Ask your friends or family for a loan – Most people do not want to try this. Getting into credit card trouble might seem embarrassing, but think about what you want before you decide not to try this. As you already know, debts add up very fast, so asking for a loan without interest from family would probably be one of the best ways to clear your debts. And who else could love you enough to do such a thing for you? The bank probably wouldn’t be that kind.
3: Use your savings – Again, you probably don’t want to do this, but hey, what other options are there? Using your savings would probably seem stupid, but think about it. You will definitely not get 15% interest on your savings, but your debts keep growing with 15%. If you don’t do any of the above, this is the only way. If you choose not to, then you will end up having to use them anyways. And by then, the debt will only be bigger.
4: The final step – Once you cleared your debts, you would want to reconsider every account that you have made. Look through the rates and terms of each of your credit card issuers. Find the best ones, keep those or look for better offers, and cancel your accounts with the rest of your issuers.
