Your First Credit Card

by : Bob

You're off to college and you'll soon run into a situation where you may need to take out a loan. You may be able to take a or if you have a job and can pay the money back fast. You may eventually need to get your first credit card to get through tough times and emergencies. Bigger loans, such as for a house or car, may require up to eight years of good credit history. Therefore, the time to start taking care of yourself financially is now, while you're in college. Sometimes credit cards and loans are the first step towards learning financial responsibility. Most students are simply inexperienced and may need a little guidance.

It used to be that very few students had credit cards or qualified for loans. Lack of credit history, income and irresponsibility were insurmountable barriers when students were looking for loans and credit cards. Now days, credit card companies are realizing that college students can be their best customers. Student credit cards can be very easily obtained and require little steady income and little or no credit history.

Building your credit is very important at this age, but you can also really hurt your credit and pay for it for years to come. Be smart and learn financial responsibility by being responsible. Don't take risks with your credit and stay on top of your budget.
Credit card companies target students for many reasons and you should be aware before you take the plunge. First off, they know that students generally haven't learned how to manage their finances effectively, and they'll make a lot of money off of late fees and unpaid balances. Students are generally unaware of rates and they may not take the time to read and understand all of the fine print in the credit card or loan agreement. They may not notice that they are being charged certain fees, such as annual fees.

Students are more easily convinced to apply for credit cards and loans. Sometimes they apply because they really need them, but sometimes they do just because they can. Credit card companies will set up booths with free t-shirts and other give-aways that entice students to apply for credit cards that they don't need. You may not have the self-control that it takes to only use your credit card for real emergencies once you have it in your hand. They also know that historically, students have used credit cards for shopping and dinner out with their friends. These spending habits are hard to break and you can get into trouble fast. Students tend to use the same card for years after they receive it.

You can build a good financial history by using your credit wisely and responsibly. Make all of your payments on time and always pay more than the minimum. Shop around before applying for any student credit cards or loans. Look for the plan that most closely meets your needs and fits your lifestyle. When you build good credit, you'll reap the benefits for years to come.