Your First Credit Card Is An Important Milestone
Most people will wait until they have a stable job after college before they apply for their first credit card. Although this seems like a great idea it might actually be a mistake.
Many companies now offer a first credit card to college students. They send out mass mailings to students currently in college offering them a credit card with a reasonable limit on it.
Some college students jump on this opportunity and before long they have their first credit card in their wallet or purse. Others don’t see the value in accepting the card since they don’t have a steady income.
Credit card companies often offer this type of first credit card deal to college students because they believe that the money is secure. They hold the view that if the child doesn’t pay the debt than the parent will. Although this is often the case sometimes it’s not and the child can find themselves finishing college with an already substantial debt courtesy of their first credit card.
If the college student can resist the temptation to use the credit card foolishly than it’s worth applying for and receiving that first credit card. The reason is that most credit card companies and banks will not give you credit unless you have credit.
If you wait until you’ve finished college before applying for a first credit card than you’ll have to prove your credit worthiness. This can be difficult if you’ve never had a credit card, loan or car payment.
Although many college students are carrying a debt in student loans unfortunately this isn’t recognized as debt by credit bureaus. Therefore it’s wise to have built up a good credit history by applying for a first credit card when you’re presented with such an offer.
If you do receive a first credit card while in college use it very wisely. This means making payments on time and not using the card up to its limit. If you do charge the card to its limit you might find that your minimum monthly payments are being applied mainly to interest charges. This can take years to pay off.
Also don’t purchase items that aren’t essential. If you cannot pay the balance off each month than you shouldn’t be using the card to buy anything. Charge only things that you know you can pay for immediately once the bill arrives.
A first credit card is the beginning step towards a lifetime of good credit. Apply for a low interest credit card and be very careful how and when you use it. The card is a reflection of you and not your parents so recognize the responsibility that goes with it.
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