The college student's guide to credit cards - Part 3
Issue date: 11/20/09 Section: News
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How to manage credit cards responsibly:
Once you choose a credit card, it's easy to get into trouble with late fees, overdraft fees, and paying the minimum balance. Here are some basic money management tips that can help you stay out of financial trouble:
Pay in full every month: When you decide to own a credit card, commit from the beginning to pay your balance in full each month. I know from experience that it can be tough to pay in full each month, but by forcing yourself to pay you will avoid a lot of long-term problems in the future.
Leave your card at home: If you're going out and know that you won't need the card, leave it in a secure place at home. There is no temptation to spend if you don't have your card.
Pay your credit card several times a month: Most credit card companies offer online bill payment. Set up an account for your card, and use it to pay your balance throughout the month. This will help you avoid a large bill at the end of the month, and keep you from spending over your limit.
Use mini-budgets: Most people have one or two areas where they tend to overspend each month (clothes, electronics, etc). Try creating a mini-budget for these areas to help you spend less.
Keep credit card rewards in perspective: Although credit card rewards like cashback and points are great, they should never be used to justify a purchase. These perks can sometimes cause you to overspend, so be cautious with them.
Stop using the card if you accrue a balance: It can be easy to get behind on your credit card payments or not to pay your bill in full each month. If you find yourself in this situation, commit to shelving your card until the balance is paid. If the card is too tempting for you, give it to a family member or trusted friend to hold for you while you pay off your balance.