Credit Cards For College Students
You need to be very, very careful about applying for and using a credit card as a college student. Credit cards can be a great convenience and a good way to begin building a credit profile � if you do it right. Do it wrong, and you can run up big bills and ruin your credit before you really get started on your career. In fact, some employers check your credit score as part of a screening process, so don't mess this up.
So many banks were taking advantage of students inexperienced with credit cards that Congress passed a law in 2009 that says you have to have a parent co-sign your application if you are under 21. Otherwise, you have to prove you have sufficient income to pay off charges up to your credit limit on the card.
When you apply for a credit card, look for one with the lowest interest rate you can get. Students don't usually get favorable terms, but anything under 20% is probably a good bet. If you get a cash-back bonus or reward points, great, but the interest rate is more important.
No matter how much credit the card company offers you, ask for a credit limit you know you'll be able to pay off. In other words, don't accept a card that lets you charge up to $10,000 if you know you can't pay that off in a reasonable time.
Don't use your card for impulse purchases � coffee on the way to class, beer on Thursday night, that cool sweatshirt you saw in the campus bookstore. But if you need to buy your books with it, go for it. Just make sure you pay off that charge before the next term, when you'll need to buy more books. And don't pay only the minimum due, or the interest will just keep raising your balance.
By managing your credit well, you'll build a good credit profile. A good guide to handling credit is the book Credit Card Debt by Alexander Daskaloff. It's available on Amazon.