Mistakes College Students Make With Credit Cards!


Credit Cards are a great financial tool. They are invaluable to people. It is a boon to the people, especially the people of younger generations. It also helps the students in many ways, as they are often without money. Credit cards help them to solve this problem of theirs.

However, many students make mistakes with their credit cards. They commit such mistakes due to multiple reasons, the primary being their inadequate knowledge with respect to the credit cards and the way they function. It is important to know the common mistakes and the way to avoid them. Below are the credit cards mistakes that college students make and how to avoid them.

Getting More Than One Credit Card

There are many reasons why adults have more than 1 credit card. Some may want a lot of credit while many would want to avail the benefits of the multiple rewards programs. However, you would require only one credit card while you are in college. It would be sufficient to cater to your needs. What is more important than having multiple cards is to effectively use your credit cards, even if you own only one credit card.


Not Using The Card

Many students think that their credit score will remain high if they buy a credit card but do not use one. This theory is completely flawed. In order to increase your credit score, you need to use it and then pay the bills on time. Even if you don’t have any activity to use the card, use your credit card at least once in a month, even if it’s for the groceries. However, you should make sure that you pay the monthly bill well before the due date to actually increase your credit card score.

Relying Too Much On Credit Card

It is important to use the credit card and then paying the bill in a timely manner, it is also important to note that you do not use your credit card in an excessive manner. You should not max out your credit card limit, or even be maintaining a high balance. This might actually harm your credit score. It is important to not bury yourself in debt.

Credit Is Not Important

While the mistakes listed above might happen due to lack of knowledge about the credit card industry. But this mistake mostly occurs due to the ignorance of the students. Many students think that the credit does not matter, but they are mistaken. The best mortgage rates are taken by the people who; have good credit. Your auto insurance has a lot of to do with your credit. Having a higher credit can save you thousands of dollars.

In addition to saving dollars, having a good credit can help you get a good job too. When you would be in your senior year, your potential employer might want to look at your credit report to know who responsible you are. If you would have a good credit, you are more likely to be placed in that company. Ignoring the credit is definitely not a mistake that one would like to commit.

Missing Payments

You may miss out on your payments sometimes, not primarily because you do not have enough money to pay the bills, but due to other reasons also. The reasons might include that you were busy with your studies, your essays and midterms.

Missing out on your payments can have a huge negative on your credit score. What is even more frightening is that the negative item on your credit stays for seven years, and that is a very long time to be in the bad books.

It is best to set up reminders in your phone a few days before your scheduled monthly payment is due. Some credit card companies might have alerts or automatic payments too. But, in any case, you should be well aware and alert too.

Not Setting A Budget

Many students do not track their finances. They don’t know what they spent on or where they spent. It can often lead to low credit. Sometimes, it may result in students getting into debts. And the last thing that the students would want to leave the college is credit card debt.

For this same reason, it is important to set up a budget. You should list out all your monthly incomes. This might include your jobs and what your family may provide for you. Then, you should list out your permanent expenditures. These would include food, school expenditure, and maybe car insurance and gas too. It is important that you set a goal for yourself and a target that you would never cross.

Not Understanding How Compound Interest Works

Nearly 65% of the students pay off their credit card bills timely every month. This is an amazing thing. Yet, many students end up in debts, either in college or right after it. This is because many students don’t get the concept of compound interest.

Credit card companies tell their customers to pay the minimum balance to avoid the late fee charges. What they don’t tell the customers is that the balance due is charges at a very high rate of interest. These high charges can add up to a lot of money if you don’t clear out your balance every month. These charges can, after some time, be more than the late fee and can even put you in debt. Therefore, it is very important that you pay off the balance every month. This will ensure that you won’t have to pay interest on the balance amount.

The Bottom Line

These are few of the common mistakes that college students often make with regard to the credit cards. Spending more than you have is definitely a problem. If your expenses are necessary, you should start a new part time job to meet your needs. It is important to be cautious and play safe than be in debt and regret for the rest of the life.


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