Student Living: Where Credit Cards Fit In

Living on your own creates a whole new set of expenses you’ve never had to deal with before—buying a laptop, paying bills, making rent, getting groceries—the list goes on and on.

And while you’re going to college, getting a full-time job that pays enough to help you squeak by every month may not be as easy as it seems. The temptation to get a credit card may be overwhelming at times, especially when card companies are targeting college students and single renters in bulk. Before you sign away your life to a credit card company, prepare yourself with the following safety measures.

Limit your card’s use

When you lived at home, your parents encouraged you to save money, no doubt. Now that they’re unavailable to pester you, you might be tempted to use your credit card to pay for a trip to Sweden for Spring Break or just to pay the rent so you can use your money to impress the hottie next door with some new gear and a fresh look. Never forget that every purchase incurs interest and if you’re not careful, your card could end up costing you double or triple what you spent. If you’re set on having a credit card, it’s best to limit use to emergencies only. Fashion emergencies do not count.

Request a low spending limit

The best way to keep yourself out of trouble is to request a low spending limit. Most credit card companies will let you go as low as $1000 or $500, but not all. By keeping your spending limit low, you keep your monthly minimum payments low and avoid delinquent payments that ding your credit and make it harder to get, say…an apartment, or a new car.

Know who and what is affected

Having a credit card affects…your credit. If you paid attention in Finance 101, you know that your credit affects your ability to get loans (such as student loans), apartments, a car and, sometimes, even a job. Some property groups run a mandatory credit check once per year to make sure you can still afford your place. And don’t forget, if mom or dad co-signed your credit card, their credit may also be affected by your purchases and payments.

Make your payment the day the bill arrives, not the day it’s due

Why is this so important? By making your credit card payment the day it arrives you ensure you have the money to pay the bill and that it’s paid on time—credit cards don’t give a grace period like apartment managers do.
Getting your own apartment and your own credit card to go with it may seem like a fantastic idea, and it could be the way to start growing your credit and building your financial status and life. But remember to keep the consequences in mind, so you don’t end up with poor credit, no car and no apartment to live in.