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Ready to Graduate? Here Are Three Tips for Proper Credit Card Usage

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credit card tips for studentsMany college students are quite familiar with the concept of debt: by the time many have obtained their degrees, tens of thousands of dollars of student loan debt has accrued. These “mini-mortgages” can restrict the financial freedom of young people and limit their ability to enjoy those formative years of adulthood.

Millions of students feel overwhelmed as a result of this and make the decision to acquire additional lines of credit to stay afloat. If you are a recent college graduate and currently feel the financial strain of debt, then you will want to continue reading to find out how you can limit further risks when using credit cards.

Pay Down Your Student Debt

While this may sound simple, the fact is that millions of students pay only the minimum amount each month toward their student loans. This sort of behavior can lead to thousands of dollars in additional interest and will negatively impact your purchasing power for years to come. The overall trend suggests that students are paying down their debt before they acquire credit cards, but each student should be proactive in paying down a significant portion of their student loan debt before signing up for any new line of credit. Most graduates will be limited to higher-interest rate credit cards: you do not want to be paying tons of interest on student loans AND monthly credit card balances.

Leave Cards At Home

Impulsive spending is a common theme among young adults, so it makes sense to reduce the number of instances in which this can happen. Credit cards for recent college graduates should be viewed as emergency lines of credit and not a revolving door of free money. Anyone who is currently facing large amounts of student loan debt cannot afford to rack up additional charges. If you treat your credit cards as valuable, responsible tools and leave them tucked away for emergencies only, you can build your credit, reduce your debt and continue down the path of fiscal solvency.

Develop A Budget

Students with no concept of budgeting can quickly fall victim to thousands of dollars of interest charges. Responsible adults know how much they earn and how much they can spend: if you are serious about building a strong credit score and being financially sound, then a budget plan is vital. While periodic use of credit cards is encouraged for building solid credit, there should always exist the ability to pay said expenses at the end of each month. Expenditures that fall outside this purview will only lead to trouble in the long-run.

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