Money makes the capitalistic world go round, and paying no mind to your bank account can be a big mistake. Money is a gateway for a good education, better health, stable housing, a great helping hand for unforeseen accidents, and so much more, but it often has a negative connotation. However, it can be very beneficial with the proper tools and tactics.
An essential tool, often overlooked during college, is the credit card. I know, its rep is not the best. Credit cards are commonly associated with crippling debt and years worth of loans. This is true if you don’t know how to use one properly, but what a better moment to learn than right now?
I grew up on a beautiful Island that has suffered through many economic crises. During 2008, my father’s business went downhill due to one of these financial disasters that led to public uproar. Since then, I’ve always avoided talking about money altogether because it was always a touchy subject while growing up.
However, this taught me the importance of saving money. Every school week, I would save my spare change from lunch and drop it into my piggy bank. This became the ritual for birthday and Christmas money, too. One day, I cracked it open and I was ecstatic because I could finally afford my first big purchase: a baby pink Nintendo DS!
Today is no different. I am a college student with an updated savings account and a sustainable experience with credit because I have learned the basics of budgeting and the importance of saving, and I want you to be able to do the same! Here are some tips on how to manage a credit card properly during college:
- Credit history is an important credential for apartment rentals and job security
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Landlords usually want to take a look at your financial track records before signing the deal, and executives looking for potential hires may want to check as well. Your credit history lets them know if you pay things on time and are responsible with your finances. In plain English, they want to know if you’re a safe bet. So, make sure you have a great credit history by paying on time.
- You’ll have emergency money
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Accidents happen! With a credit card, you can pay off many emergency services at the moment, granting you peace of mind. Even though you’ll have to pay it off later, it’s a relief to know that an unexpected issue can be fixed on the spot.
- Reep the rewards!
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Nowadays, many credit cards offer incentives to their holders, such as airline miles or cashback. The Discover Student Credit Card offers cashback and points if you have a good GPA. Go check it out!
- Never spend more than 30 percent of your cap total
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It’s tempting to go overboard with borrowed money. Unfortunately, this is how most people wind up in debt― they spend money they won’t have later on. To avoid this, 30% is now your red line mark. For instance, if a company approves $500.00, only use up to $150.00. Don’t cross your limit, stick to it!
- Pay off your credit card in full
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Your credit score improves as long as you pay your card in full and on time. Keeping a track record of your transactions helps you to stay aware of your spending. Personally, I use a notebook where I jot down the times I use the card, and I make sure my savings account reflects the amount of money I’ll eventually owe.
- Use your card for small daily purchases
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Trips to the grocery store, gas stations, and drug stores are small transactions that will ultimately add up at the end of the month. Might as well use your credit card for them! They’re small purchases, and you will easily make up the red line mark.
- Link your credit card to your savings account
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I keep most of my money in my savings account. This is so that I can make sure the company will charge it and clear off my debt.
These are just a few tips I’ve picked up along the way. It’s essential to educate yourself on handling finances if you want to build a stable lifestyle post-college. Money can empower you and make you independent. It’s a hectic world out there, and in order to acquire our basic needs for survival, it’s important to learn to deal with money as soon as we can.