5 Tips to Use Your Student Credit Cards Wisely

Having a credit card starting from college can teach you a thing or two about personal finance. It can also help you develop a more responsible outlook in life. Besides, the smart use of a student credit card will prepare you for other important financial decisions in the future, such as getting a home loan or getting a credit card with a higher limit.

However, it’s important to do some research on your part and check out this list of five tips before you apply online for a credit card.

1.      Pay Your Bills on Time

It’s nice to cultivate a habit of paying your credit card bills on time. It helps you establish a discipline and eventually leads to superior management of your finances. More importantly, it helps build a positive credit history, and a good score can make your life very easy in many ways. For instance, you can have a better loan approval rate and the ability to get pre-approved loans. So make timely credit card payments a priority.

2.      Keep Spending Under Check

As a student, you must keep your expenditures under check. You probably don’t have a stable source of income yet. Going overboard with your shopping is naturally going to have downsides. Don’t get impulsive while shopping on your credit card because, in cases of unpaid bills and delayed payments, your credit score is going to take a hit. In other words, try not to spend more than what you can afford.

3.      Don’t Apply for Too Many Cards

You shouldn’t apply for too many cards at once. Having too many cards at one time can mess up your finances, as every hard inquiry takes your credit rating down by some points. Besides, it’s not a great strategy to burden yourself with too many cards, as you will need to spend considerably towards their bills. Before you apply for another card, you must find out how to check your CIBIL score and go ahead only if it’s in the right zone.

4.      Avoid Card Fees

As you start your credit-building journey, you must look for cards with competitive fees. You can choose a lifetime-free credit card, or a card with no over-limit fee too. However, the annual fees can be worth it if your card offers rewards points that you can redeem for online and in-store purchases. Some credit cards include no fee for redeeming points.

5.      Learn About Credit

Understand the importance of a good credit score and all that you can do to improve it. You need to understand what can impact your score, or how to check your CIBIL score. For instance, if you have any student loans, it will impact your score and also be mentioned in the credit report. Understanding how credit works can help you sort out your finances in the long run.

A student credit card can help you in many ways if you know how to use it wisely. It’s recommended that you do a lot of research and fall back on these tips whenever necessary.