The college years are like no other. Full of new-found freedom, its like four years of paradise. Suddenly, you have the freedom to do practically anything you wish, be it sledding in mud, ordering a pizza at 3 AM, or going into debt.
Most people don’t realize that at least on a certain level, going into debt is a choice. Albeit, there are certain things you can’t avoid, such as loans. But what about the “extra” credit debt? Is that simply a part of college, too? No!
Many places will tell you to avoid getting a credit card in college – I disagree. Being in college myself, I believe every student should have a credit card. It’s not that credit cards are inherently ‘bad’, it’s that most college students simply don’t use them responsibly.
The first thing to recognize when getting a credit card is that it’s not free money. You are going to pay every penny back, plus interest. When having a credit card, think of it more on the lines of a cash advance. Your car breaks down and you don’t have any money, so you get a ‘cash advance’ and pay for it that way.
Once you have gotten into this frame of mind, there are some other tips to follow when avoiding debt in college.
Save the majority for emergencies
I’m not saying use it only for emergencies, however. By all means, use it to get that shirt you want. But only that shirt, and leave the rest for emergencies. Remember, you are going to have to pay this back, plus interest. Using this card unwisely could mean spending an extra $5, $10, or $20 on that shirt because of eventual interest.
Get a checking debit card
Most large Universities have a bank directly on campus. Go there, open a checking account, and get a debit card for it. You can use this card the same as a credit card, minus the bills and interest, because it is coming directly from your money. Then your credit card is ‘extra’ money for emergencies. If you do use your credit card, hop online and pay it back off with your checking. This way, you always have credit, and you can avoid interest.
Don’t go over your limit
Whatever you do, don’t go over your limit. You get charged high, high fee’s for this, and you will go into debt fast.
Don’t spend more than you have
How much do you make a month? Now deduct your monthly bills for that, such as: gas, tuition payments, food, insurance, etc. How much do you have left? You should spend no more than that amount in credit, so you can pay almost all of it monthly. If you are trying to build good credit while in school, don’t pay all of the bill, leave a small amount on the card. This will build good credit, and remember: good credit = apartment and car after graduation.
Make a budget
I know, I know, your in college, and frankly you have better things to do. Well, guess what? Frankly, the debt collectors don’t care. Keep that in mind when trying to decide if you have enough left on your card to splurge one last time this month.