The first step in using a credit card responsibility is picking the right card for you as described in the post “Picking a Credit Card.” After all that research and hard work, once you get the plastic in your hand, don’t run off to the nearest shopping mall. Realize now that the little plastic thing can make or break you, depending on how you use it.
Open Just One Card
As a college person you really don’t need more than one credit card. If your credit limit on your first card is too low, call the credit company right away. Tell them that you are happy to be their customer and then explain why you need a higher credit limit. Whatever you do, do not go over your monthly credit limit. You’ll take a nasty financial hit for it.
Also it looks better on your credit score if you open just one credit card.
Last but not least, do not open a retail store credit card. No matter if you get 10% off your next purchase or whatever other deal they try to tempt you with. If you did your credit card research before you signed up for one, then you have the best offer in your hand already.
Pay in Full
Pay off your monthly credit card balance in full every time. You save a lot of money doing this because you aren’t paying any interest later on. However credit cards are oh so easy to use and when your balance comes in the mail, you might scream in surprise and realize you don’t have enough to pay in full. Don’t even go there. In Excel, create a simple budget and track your daily spending by plugging in the numbers. That way, if you are week two into the month and are getting too close to your monthly budget, you can chuck your credit card in the corner and eat noodles every day and skip that shopping session until next month. Being a starving student is part of the college experience after all.
Hopefully you are capable of paying your monthly balance in full and if you are, hopefully you got a credit card that gives you a cash back reward. It might seem great to use that money to buy a new purse, but doesn’t it make more sense to apply the cash to next month’s statement? That way you already have a head start into the new month and that feels good.