College Students Should Apply for Credit Cards Now
When you’re in college you may believe you don’t need a student credit card. You don’t really want to go into debt any farther than those student loans, so you live on what you can earn.
That’s good. You shouldn’t go into debt. But you should own a student credit card, and you should apply for it now, before the new rules go into effect.
Once February rolls around, students will be severely limited in their access to credit cards, but those cards you have now will not be affected. Getting one or more now means less hassle.
But why do you want it?
Simply because you’ll need the credit history when you graduate and get out into the world of work.
Your first step when you leave college will probably be to find employment – and employers look at credit reports. If you have no credit, you’ll have no report. You may be overlooked for someone who not only has a credit report, but has a good report.
Next, most graduates want to find a place of their own to live. And guess what? Landlords pull credit reports. They want some assurance that you’re the kind of responsible person who will pay the rent on time every month. With no credit report, all they have is your verbal promise.
After that you might want a car to take you to and from that new job. And you know that before a car dealership will give you a car loan, they’ll look at your credit report.
So – the student credit card you get today is not for the purpose of spending money you don’t have. Its purpose is to help you begin to build a solid credit reputation and high credit scores.
Get it, put it in your wallet, and take it out only occasionally to use for a purchase that you will be able to repay when the statement arrives. You should use the card at least once per calendar quarter.
Be careful to charge less than 30% of your available credit line. If you have only $200 – never let your balance owed go over $60.
By using the student credit card sparingly and paying the balance each month, you’ll slowly build a credit history that will contribute to high credit scores by the time you graduate. Then, when your classmates are paying high interest for car loans and new credit cards, you’ll enjoy preferred treatment as a consumer with an already established good financial reputation.
