The College Grad’s Guide to Using a Credit Card

At some point in your college career, or perhaps a short time after, you filled out an application and received a piece of plastic in the mail with your name on it! Maybe you fell for a free gimmick your first few weeks at school, and before you knew what was happening, you had a $1,000 limit in your wallet. Perhaps you chose to open a credit card so you could begin building your credit history. Regardless of how and when you obtained your first credit card, during your first few years out of college, you may be itching to use it on an electrical bill, a move to a new city, or a first date. Before you start swiping and signing, consider these guidelines.

Don’t Assume

One of the biggest mistakes college grads make with their credit cards is they assume they’ll have the means to pay it all off later. Don’t bank on raises and promotions. Don’t assume you’ll find a good-paying job next month. If you don’t have a set-in-stone plan on how you’re going to pay back your debt, don’t assume you will later.

Have a Plan

Before you start viewing your credit card as just some extra money, have a plan for what your credit card is used for. Is it only for emergency situations, such as a flat tire? Is it for one major purchase, like a new computer or a mattress? Is it solely used to build your credit history, in which case you would use it to make purchases, and pay it all off within a month? Decide what the credit card is specifically used for, and don’t deviate from your plan.

Create a Budget

One way you can ensure that you won’t be using your credit card on every bill and every trip to the grocery store is to create a budget for yourself. When you get your first job and you have a good grasp on how much you spend on bills, loans, food, gas, rent, and entertainment, sit down and add it all up. Are you spending more than what you’re making? If you’re not ending up with money leftover when all is said and done, you’re more likely to start using your credit card for little things here and there. Work on making cuts to your budget before you start using your credit card for purchases.

Know What Makes Your Score

The factors that make up your credit score are rather complex. It may be a good idea to familiarize yourself with all that can improve or damage your score. For example, not having a credit card at all, high balances, too many credit cards, or credit cards you maxed out too quickly can damage your credit. Having a few, responsibly managed credit cards you use every now and then and pay off quickly are good for your credit.


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