Credit Cards and Credit Building for Students

Everybody has to start somewhere, right?  Well, part of the trick in establishing credit is that it’s kind of a catch-22.  You need to have some to get some.  Remember the old line that you can never be too thin or too rich?  My grandmother used to say things like that all the time.  But at least in that case, you could go on a diet to improve your situation, even though you couldn’t make money squirt out of your ears, it was certainly better than nothing.  With credit though, you have to work around the apparent obstacles to get what you want.  There are a number of possibilities.  The main thing is to make sure, especially because you are young, that you do sound research and don’t let yourself get taken for a ride.

If you are in college or even high school, then you probably already know this.  Credit card offers to students has become like the latest viral outbreak.  The offers are everywhere.  Credit card companies have special deals for young people with no to little credit history.  So the good news is, that this could be your in.  The problem is that generally speaking, young people are not very savvy about how they handle their cash let alone credit.  You must be clear about what a credit card is and what it is not.  It is not free money, or extra money.  It’s just a card that says the credit card company has given you this piece of plastic which, when you use it, they believe you will pay your bill.  So use some sense be restrained in using your shiny new credit card.  Because though no one will come break your legs when you credit card payment doesn’t arrive on time, you still need to pay it.  Your credit history will follow you around like a dog that will never go away.  Whether that dog is an attractive, well-mannered animal or a gnarly mongrel depends on you.  Just know this, the dog will always be there.  And bad credit like a bad dog has the potential to eat you out of house and home.

One other option is that if you and your family are close and get along sweetly, you may ask if you can be placed on one of your parent’s credit cards as an Authorized User.  This lets you take advantage of their good credit history.  This only works if the company they use will report your activity to the credit bureaus.  Not all of them do.  So first, ask the folks and if it’s okay with them, then they will have to find out how the credit card services of the credit card company handles it.  So while it might be fun, there is absolutely no credit history advantage to using their credit card if it will not be reported.

Lastly, you can apply for a secured credit card.  This is a simple deal in which you do have to have some money up front in order to make it work.  Basically, it works like this: you put up three hundred bucks to credit card company Z, they will give you three hundred dollars as a spending limit.  What you get in return in the beginnings of a credit history.  Be careful here too.  Though there is a strict limit, you can blow past it amazingly easily and end up with a $1000 bill from credit card interest and late fees and so on.

So there you have some of the basics.  Check it out.  Consider well and then proceed.  Just remember, keep a budget and never ever spend more than you can afford to pay.  Credit card companies all charge interest on the money they loan you and often the rate is so high, that it isn’t worth it.  A $16.00 pizza can turn into a $100 debacle unless you pay that bill as soon as it comes and avoid unwanted credit card debt.  Before accepting any old credit card offer, search for the best credit card that fits your lifestyle and credit background.  The smoothest process is to look into the credit card online and compare features.  The best credit card with the best credit card rate may take just a little bit of research to acquire, but the rewards are worth it.