College Students – How to Use Credit Cards Wisely?
College Students

College Students – How to Use Credit Cards Wisely?

EPF Last Update: July 7, 2015

Sure, being students, you are an all grown-up people now and you are able to manage a credit card. But are you really that informed about what a credit card is all about? Do you know about the taxes, commissions and interest rates? The answer is surely no, but, then again, we are here to give you quick, clear, useful and above all realistic information.

First impression on credit cards is not a good one. Thinking of all the costs involved: the issuing fee, administration fee, withdrawal fee and so many things ending in “fee” gets a normal, money-oriented person, giving up the idea before any intention of being a happy beneficiary of a brand new credit card.

Use your credit card in an intelligent manner.

Financial specialists have proved that, used in a responsible manner, the credit card can bring a real earning! The famous credit card can come up with shopping bonuses, electronic prizes, luxurious vacations, concert tickets and so much more, depending on the holding bank. Of course, because it was just too good to be true, there are some conditions to meet. Better said, it is one golden rule that you have to obey strictly. Make sure you use the credit card as it was meant to: to register direct payments to the merchants. If you repay the money in full within the grace period, interest is zero. Whenever you disobey this rule it is obviously a punishment because if you take out money from the ATM, the bank charges you. And the charge is an amount which is not worthy of being neglected.

Use your credit card in a manner that won`t get you in debt.

There are times when it’s better to think twice before using the card. We know that the temptation is big, we know it is easier to get the card out of your wallet rather than cash. It is proven that at a mental level, we don`t feel the same pressure or guilt when paying using a credit card.

When you have very little money on the card, before you go on a speedy shopping spree, you should always check the amount of money you have on the card. If you notice a little amount of money, you shouldn’t use the card unless you are a thrill seeker, because embarrassing situations that arise at the cash register.

We are aware that exams, test and all that learning takes a lot of your free time. That`s why the easiest way to shop for students is online. But, when doing online transactions, be sure you are using trustworthy sites. If you don`t trust the site or if you don`t know anyone who had at least one experience buying from the specific site, don`t take your chances! There are many impostors out there, ready to take your money without practically selling any product!

Buy only what is necessary

Decide if what you want to buy is a necessity or wish. At young age (and, not only secretly) we tend to make bad decisions when it comes to shopping. Don`t hurry into a purchase. Take your time and you won`t regret it. First of all, ask yourself two questions…primarily, ask yourself if you really need the product and secondly, ask yourself what would happen if you don`t buy it? If the answer to the second question is “nothing, I can live without it” it means that you simply don`t need that and you should get away from it!

Let`s now be realistic! We were all students and we all bought at a certain point things that were bootless. It`s okay, you can do it, we won`t tell! But please, use cash, not credit cards. You don`t want to run into debt for just fulfilling a caprice, don`t you?

Shopping has so many tricks and tips that we are forced to draw an alarm signal in two other aspects. Special prices for selected items! We all love discounted prices, sales and bonuses! When you are tempted (and we know you are) to buy an expensive product that`s on sale, ask yourself the two questions above-mentioned. If the answer to the questions is still not getting you anywhere near giving up of the idea of buying the product, at least don`t use the card.

Why? Because the things that we are buying should reflect our social status, and even if the amount on the card is allowing us to buy the expensive product, that doesn`t mean that we can truly afford it! Let`s face it…the amount on the card should last at least 3 months and we are sure that it is destined for grocery shopping! Also…think about how you are going to explain the purchase to your parents!

What about cheap product, you`ll ask? Well, you will be disappointed but our advice is not to use your credit card when you are going to buy products that you can afford buying with cash. You can`t just swipe your card whenever you are in need for inexpensive product just because you have one! Interest will gather and you`ll end up paying more than all the goods purchased sum together!

Conclusion: choose a cheaper credit card and get informed!

Well, nowadays banks are customer oriented and really interested in their needs. You`ll be happy to know that there are credit cards made for students, which are a cheaper alternative to the regular credit cards. Unbelievably, but they really take into consideration the rough life of a student and they are kind enough to offer lower commissions, lower interest rates and a lot of bonuses for specific shopping, especially on books, text books and student related items.

Enjoy your credit card and welcome to the grown-ups world!

Elite Personal Finance

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