Applying for a student credit card can be a lot of excitement. This is the path to adulthood and it just makes you feel like a whole another person. What students fail to realize are that credit cards can really hurt you in the long run if you don’t know how to use them properly.
There are a few steps you should follow if you want to be debt free your entire life. These steps include being responsible, setting a budget and sticking to it, and using your credit card like its money. If you follow these three golden rules, you will be on the right path.
In the meantime, if you haven’t been in debt before or you’re currently in debt, we have created a little list to let you know exactly when you’ve hit the hard road.
You know you’re in debt when…
- The magnetic strip on the back of your credit card is completely worn out and the cashier has to type it in manually.
- You start to apply for other credit cards and you use these credit cards to pay off your other debts.
- You’re getting so many packages in the mail because of your ridiculous spending online that the mailman knows you by first name.
- Before you go shopping, you have to figure out which card you can use because the rest may be maxed out.
- You start to charge small things like a pack of gum because you have no cash at all.
- The credit card company calls you each time you use your card because you’ve used it so many times, they think it’s been stolen.
- You start to ask friends of friends for loans to pay off your monthly bill.
- You ask your parents for an early cash gift so that you can pay off your monthly minimum.
This list is intended for a little comic relief and it can also be true. If you find yourself shaking your head at this and saying to yourself “oh my, I do this all the time.”, you may be in trouble. If you do find yourself being caught in this mess, there are plenty of ways of getting yourself out of this hole.
Like we mentioned above, you can prevent debt before it even happens. If you’ve already fell into the debt hole, here’s a few helpful tips that will get you out of it.
Make sure that you pay the minimum on your credit card statement, regardless of what you have. You don’t want to ruin your credit score!
If you have extra money left over for the month, put it ALL toward your credit card bill.
Always make out a written budget. A written budget will help you better understand where your money is heading. If you can tell where your money is going, it’s a lot easier to save, trust me.
Last but not least, if you are having a hard time with all of this just cut up your credit card and use a debit card. A debit card acts like a credit card but the money is directly taken from your checking account. This way if you don’t have the money, you can’t spend it!