If you walk around any post-secondary campus at the beginning of the semester, you’ll often find many credit card company representatives setting up booths to promote their companies and sign up students for their credit cards. While this is convenient for many students – and a great marketing strategy for these companies – the reality is that many post-secondary students do not know enough about credit cards and the proper way to use them without getting buried in debt.
Today, I’m sharing the five critical questions post-secondary students and millionaires-in-the-making need to answer before applying for a credit card. I explain why it’s important for you to understand your motivation behind wanting a credit card and how you plan to pay off your monthly purchases. I also share alternative card options you can use as well as tips on how to be a responsible credit card holder if you decide that applying for a credit card is the best choice for your needs.
“I don’t believe credit cards are good or bad. Like anything, it is all in how you use them.” – Tracey Bissett
This Week on Young Money:
- The average credit card debt for post-secondary students.
- The importance of understanding why you want a credit card.
- The importance of pre-planning how you will pay for your credit card purchases.
- Evaluating alternative options beyond applying for a credit card.
- Considering and comparing credit card introductory rates and interest rates.
- Comparing credit card rewards and benefits.
- Considering annual fees, cash advance fees, and other fees associated with being a credit card holder.
- Considering specialized cards to meet your specific needs such as student cards and retail credit cards.
- Why it’s critical to pay off your credit card balance in full each month.
- What to do if you are unable to pay off your balance in full.
- The importance of regularly checking your credit card statements for errors and reporting them promptly.
- The importance of keeping your personal information confidential.
- The impact of irresponsible credit card usage.
5 Questions to Answer Before Getting a Credit Card:
- Why do I want the card?
- How will I pay for the purchases on the card?
- Do I need my own card?
- What should I look for when comparing credit cards?
- How do I use a credit card responsibly?
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