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Students: Build Your Credit Early With a Low Limit Student Credit Card

As you begin to embark on the world as a college student, responsibility for yourself shifts from your parents to you. One of the most important things a college student can do for their future is to begin to build their credit. Your credit score will follow you for the rest of your life, and a good score will help you to obtain loans for life’s essentials. If at any point in the future you hope to purchase a vehicle, a home or another large item, now is the time to begin to build your credit.

The great thing about low limit student credit cards is that they are fairly easy to obtain. Since you most likely do not yet have a credit history, this is good news. There are a variety of credit card companies that offer students their first low limit card, and credit history is not necessary. Check out the offers available and chose one that seems good for you.

Once you have your card you will start to build your credit immediately. Within about two billing cycles your credit history will begin. This is why it is essential for students to use their credit card wisely. If you screw up and charge too much or don’t pay your bill, it could be devastating to your credit history. Following the below listed steps will get you off on the right foot.

First, students should come up with a monthly budget. List items on your budget such as groceries, cell phone bill, spending money and any other miscellaneous expenses you may have. Before you begin to use your credit card, make sure that you will have enough money to cover your monthly expenses, if not you will need to trim your expenses or get a part time job to cover them.

Now, decide what you will charge each month on your credit card. One or two small charges is a great way to start. Charging a small grocery bill or even your cell phone bill each month is a perfect way to begin to use your credit card.

Once your monthly bill arrives in the mail, you should pay it immediately. If you need to wait for your next pay check, that is ok. Just be sure to pay it a few days before it is actually due. Also, make sure you always pay the balance in full. Never leave a balance on your card as that will not give you the credit score you are looking for. Plus, you will have to pay incurred interest on your balance.

As you use your credit card each month, do not overspend. Having plastic can make this very tempting, but don’t give in to the temptation. Wise credit card spending habits should start early. Learning to be frugal now will carry over to your future spending habits. Essentially, if you do not have the money for a luxury purchase, don’t buy it, even if your friends are. Down the road you will thank yourself.

If you are careful and follow the important recommendations in this article, you will be well on our way to establishing a good credit history. By the time you graduate from college you will have the groundwork set for your future loan needs.

Tags: credit score, student credit card

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How to Build Credit for the First Time

Building a good credit score is something very important for one’s financial security and well-being, especially in developed economies like the European Union, United States, and Canada. Run through the steps below and find out how to build a good credit record starting from scratch.

The instability of labor markets that came along with the global financial crisis forced many people to migrate abroad in search for better employment opportunities. Sooner or later, most of them return home wealthier and, naturally, they try to build a stable credit score in their home country.

The most important point to remember when you start building credit from scratch is that there is no need to hurry. To spare you the disappointment, it makes little sense to apply for a credit card with the big creditors in your area, simply because your application will probably be turned down with the message: “No credit history available.”

Believe it or not, the first and, obviously, most basic step towards establishing first-time credit is to visit stores that accept credit. Buy something affordable on monthly installments like a piece of furniture, for example. Chances are that when you pay the item off, the store’s manager will probably agree to give you a prepaid credit card, initially with a high annual interest rate.

Note that most of the big retail chain stores will probably grudge at opening a checking account on your name, but this should not discourage you from shopping around. There are plenty of smaller stores out there, and they may take your situation to heart, agreeing to give you some credit. Some stores even give credit to immigrants (at outrageous interest rates) if they can show a paycheck stub. Alternatively, you may try to get a secured credit card with your local gas station chain. This is not much, of course, but it’s a good start and the card will also save you small cash each time you fill up the tank of your car.

Once you have established some credit history with a department store or a gas station card, you will start receiving credit card offers from multiple creditors. Most offers will come with high interest rates so it is imperative to be choosy. Whatever card you may choose, you have to keep in mind one simple rule: keep your credit balance low and do not miss even a single monthly payment. Some people think that a one day delay will not make a big deal.

However, just a few of the credit card providers offer up to a three days grace period. Most companies don’t, and it’s important that you make your payments on time.

Finally, don’t cancel your credit card once you paid it off. Even if you don’t plan to use the card, it helps keep your credit score up. In addition, you can prevent credit card debt that could, in turn, prove very harmful to your budding credit score by simply telling your credit card issuer not to accept payments above a particular amount in your national currency.