5 Tips to be money wise in college
by Joy Mali Writer College is a time of learning and growing and that also applies to learning about finances. You work to better yourself with an education and some real world experience. The same can be said for your finances as well, since many students’ first credit cards and money management experience comes in their freshman year of college. There are some simple yet very important financial tips for college students they need to keep in mind as they work their way through school. Presented here are five tips that will make it easier for the college student to start off on a firm financial footing.1. Open Your First Account
Without a line of credit you can have no credit score. Without a credit score it is hard to get loans and you may be denied credit on certain applications--such as for a car or an apartment. Getting your first credit card is the first step towards building your credit. As long as you make wise purchases and are smart in repaying your debt, this might be one of the greatest advantages to increasing your new credit ranking.
2. Pay off Debts
When you do make purchases on your card, it is imperative that you pay off that debt as soon as you possibly can. Every month that you carry a balance on the credit card, you end up paying interest. With rates that could be as high as 20% or more, you could soon be paying almost as much toward interest as towards your actual balance. If you have $500 as a balance on a card and take several months to pay that off, you may end up paying $700 or more by the time it is paid off because of the interest. This is what gets so many students in trouble with their first line of credit. Improving credit scores when you are just a college student is about wise management of your finances and being smart about debt and living within your budget.
3. Piggyback at First
When you are looking at trying for a line of credit, it can be hard when you have no history to back you up. Lenders may be leery of giving credit to someone when they cannot view a credit score. It may help if there is someone who is willing to be a co-signer for you. If mom or dad or someone else will go in with you on the credit card account, their good credit can help you get the line of credit. You must be very careful when doing this, though, because any mistakes you make can impact both party’s credit and the same goes for any problems the other person may have.
4. Watch the Number of Credit Applications
Be careful not to apply with too many credit card companies. Do your research beforehand and narrow the list down to three or four cards and apply for those, making sure you apply for them all within a month’s time. If you make frequent applications for new lines of credit, it looks risky to lenders and it can actually hurt your credit score.
5. Pay on Time
The final piece of money management advice for college students is to make all credit card payments on time. Late or missed payments can quickly sink even the highest credit score. Lenders want to know they will get their money back when you agreed to repay it and missed or late payments show you are not reliable. Pay every bill on time and always try to pay more than the minimal amount due each month. This helps lenders trust you and will also help you keep your debt under control by paying it off sooner.
College is a time of learning and growing. You work to better yourself with an education and that must apply to your finances, as well. Handling your first credit cards in college is the time that real world money management practices are learned and established.
Joy Mali is an active finance blogger who is fond of sharing interesting finance management tips to encourage people to manage their personal finances. More specifically, she advocates that people should check credit reports and scores regularly.
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Created on Dec 31st 1969 18:00. Viewed 0 times.
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