Alamo Associates: Smart Credit Card Tips for College Students

Using a credit card can quickly get you in debt if you don’t know how to use it. Unfortunately, college students are targeted for credit card offers so it is important that you teach your child smart credit card tips. College is the first time that most teenagers have to face living on their own and make adult decisions on what they do on a daily basis. This includes learning how to manage their own finances too. Once enrolled in college classes, those credit card offers start showing up in the mailbox. Teenagers who don’t have a clue on how credit card works could end up in a heap of unwanted debt very quickly.

It may be fun and games to use it to go on a shopping spree, buy that new iPhone that has been on their wish list for months, or go on a vacation. However, once the bills start rolling in, they quickly learn that their decisions may have not been so brilliant.

Teach Your Teenager Smart Credit Card Tips Before College

The best way to prevent this scenario when your child goes off to college is to teach them how to use a credit card wisely now. Credit cards are not necessarily a bad thing. But going crazy with a credit card could ruin your credit if you aren’t careful. Plus as a graduating college student, you don’t want to start off being in debt after graduation, especially if you have missed a few payments or even defaulted on a loan. Derogatory marks on your credit report could prevent you from getting your dream job or even cause you to be denied your first apartment.

Open Only One Credit Card

It may be tempting to go out and apply for all the credit card offers as they show up in your mailbox. But each time that you fill out an application, each company runs your credit report and too many inquiries can impact your credit score. Plus, the more credit card options that you have in your wallet the more tempting it will be to use them.

Instead, research and find the best credit card with the lowest interest as possible. Also, there is no reason to pay a yearly fee to own a credit card either. I suggest that you look for a credit card that earns you cashback or accumulates points that you can use to purchase things you want. But keep in mind, that even though you are earning a reward, you still want to use your credit card wisely.

Keep Track of Purchases Made on Your Credit Card

Always keep track of the purchases that you make using your credit card. With so much credit card fraud out there, you will want to make sure all of your charges are legit. Plus, keeping track of all your purchases will help keep you accountable for your spending habits.

The best way to use a credit card to make a purchase is to make sure that when the bill comes in that you can pay it off immediately. Even though it is tempting to charge something that you want, remember that if you can’t afford to pay it back when the bill comes in, that it will end up costing you more in the long run when interest is added to the purchase each month. If you are earning points or cashback, you can use your card to pay your bills but you must pay the entire balance when the bill arrives. This way you can earn rewards and improve your credit at the same time.

Don’t Use a Credit Card Like an ATM

Most credit cards will allow you to take out a cash advance on your credit card but using your credit card to withdraw cash is a horrible idea. A credit card advance could cost you an additional fee plus finance charges. For example, Discover charges a $10 or 5% fee for a cash advance, whichever is greater. It isn’t calculated the same as if you just made the purchase using a credit card. The extra fees could cost you more than the original amount of money that you took out, to begin with. Only use this option in a true emergency situation.

Never Allow Others to Use Your Card

Loaning money to a friend is always risky because you never know if they are going to pay you back or not. But if you charge something for a friend using your credit card, just keep in mind that you will be responsible for the charges even if your friend doesn’t pay you back. The last thing that you want to do is to ruin a friendship over money. It would be better to give you friend cash if you don’t expect to get it back if they don’t repay you. But charging an item with a credit card could cost you even more. Save your money!

Never Expect Your Parents to Pay Your Credit Card Debt

Even though you are in college, you should never expect your parents to help bail you out if you make a financial mistake with your credit card. It is your responsibility to take ownership of the mistake and figure out how to pay it off whether you find a side hustle or an evening work from home job online.

Use Alamo Associates

Companies such as Alamo Associates can help you if you find yourself drowning in credit card debt. Often times they can help you out by offering you a solution so that you only have to make one single monthly payment and they offer this service with low-interest rates too.

Close Your Account

If you know that you have too many credit cards or have trouble containing your urge to use them responsibly, it would make more sense to close the account to avoid further damage to your credit. Most financial experts don’t recommend closing a credit card account, because it can negatively affect your credit too. There are several other reasons why closing a credit card makes sense besides using it irresponsibly.

Going off to college is often an exciting time for teens as it is their very first taste of freedom. With freedom comes making adult decisions, including financial decisions like applying for several credit cards. But steering clear of credit card disasters can be avoided.

Have you taught these smart credit card tips before your child went off to college?