Friend of mine (new to USA) was asking for tips to manage credit cards. He got Discover Credit Card (for student). He would use the card to make a purchase, pay the balance the same day.
So, he would spend $30 in walmart for Groceries using the Discover Credit Card. Then come home and pay $30 to Discover. I told him, I would write some tips to manage credit cards and credit wisely.
If you haven’t applied for a Credit Card, then read this post first - How to Build a Rock Solid Credit History in 1 Year.
After reading the above link, you can read the following tips to manage your credit cards wisely.
Tips to Manage Credit Cards
- Avoid applying for credit cars with high interest rates.
- Look for credit cards with low interest rates and no annual fees.
- Don’t spend the money that you cannot afford.
- Stay within your credit limit. Track your credit card transactions and charges frequently.
- Always have a budget. Don’t use your credit card to buy items that you really cannot afford to buy. [100 Money Saving Tips]
- Understand the terms of service before applying for a credit card.
- Don’t apply for credit cards when it comes with free offer. Free with credit card most of the times comes with some catch.
- Pay your credit card bill on time.
- Pay your credit card bills in full. Carrying balance in credit card implies you have spent more than you can afford.
- Students will not have huge monthly income. So, know how much you have in bank account (or income) and spend carefully.
- When you make a purchase using credit card, check same amount is reflected in the online account.
- Limit the number of credit cards.
- Don’t use the card, then come home and make immediate payment. Wait for monthly statement, then pay the amount in full.
- Request a Free Copy of Credit Report at annualcreditreport.com and make sure information in accurate.
- Pay the Credit Card Bill on time, else you might have to pay additional fees.
New students in USA will be usually exited to get credit cards. But, limit the excitement to max 2 credit cards till you graduate.
When you get a job, then apply for a credit card that suits your need.