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10 Best Credit Card Tips for College Students

June 01, 2010

By Barbara Marquand | Money Rates Columnist

Credit cards come in handy in emergencies, are practically essential for shopping online, and--if you use them wisely in college--can help you build a good credit history.

If you're under 21 and don't have a regular income, under new credit card regulations, you'll have to get your parents to cosign for a card. That means your credit card use will affect their credit scores as well as your own. Follow these 10 tips to make good credit grades:

1. Shop for the best deal.

Look for best credit card for college students 2012 with the lowest annual fee and interest rate and a straightforward rewards program that gives you something you can use--like cash.

2. Plan credit card use.

If you plan to use the credit card just for emergencies, then define "emergency" beforehand. Is it an unexpected car repair or a craving for pizza when you're sick of dorm food?

3. Track your spending.

View your credit card balance online frequently to keep track of spending and make sure you're staying within your budget.

4. Oh yeah, create a budget.

Before you get a credit card, establish a budget. Define your expenses and how much you have to spend each week on extras.

5. Keep your credit card to yourself.

Don't lend your credit card to anyone, even a beloved roomie. Make the transaction yourself if your friend needs a loan. Keep your credit cards and statements in a safe place--not lying around your dorm room for visitors to see.

6. Pay your bills on time.

Late payments show up on your credit reports and stay there for seven years. If you're more than 60 days late, your credit card issuer will hike your interest rate to the stratosphere. Paying your credit card bills on time is the best thing you can do to build a good credit history.

7. Keep credit card balances low.

Don't max out your cards--that hurts your credit score. Instead, keep balances below 30% of your credit limits.

8. Better yet, pay your bill in full.

You'll save a ton of money in interest if you pay off your credit card bill in full every month. If you can't meet that goal, pay more than the minimum due, or you'll still be paying off late-night pizzas when your children start school.

9. Avoid cash advances and convenience checks.

These transactions carry fees and higher interest rates than regular purchases. Not only that, interest begins accruing immediately--there is no grace period. Use a debit card for cash instead.

10. Report unauthorized charges or lost credit cards ASAP.

Call your credit card company immediately to report a lost or stolen card or suspicious charges on your statement. As long as you report it, under federal law you're liable for no more than $50 of unauthorized purchases per card--and most credit card companies won't make you pay a cent in fraud cases.

Follow these 10 tips and you'll be on your way to a solid credit history, which will help you qualify for car loans, win approval for apartment applications, and land your dream job after graduation.

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