It’s a new school year. Among other things, college students around the world will be bombarded with credit card applications, offering instant credit. It feels like free money. Low introductory rates make us feel like we earned some bonus money by being accepted to our prestigious institution. It’s not until months/years down the road that the real pressure comes to bear. Once those introductory rates disappear the debt will still be there and will start to crush you.
Credit Cards are useful financial tools if you pay off the balance at the end of every month. Otherwise, it’s a trap that will hold you hostage for years. Below is some helpful advice in selecting a card (and help you avoid the credit trap):
- Read the fine print. Make sure you understand the terms offered
- Don’t request higher credit limits. You’ll be tempted to use this credit space and get yourself into trouble.
- Get just 1 credit card. That’s right, just 1.
- Don’t just take the first card that you see. Shop around for the one with the lowest rate (not just introductory rate). Some companies charge interest rates up to 29%
- Plan to pay down the whole balance every month. As soon as you start carrying a balance, debt and interest will be your enemy 24 hours a day.
In short, if you are wise with your finances, you will effectively remove one stress from your life. School is stressful enough, you don’t need money wearing you down too!
Those who already fell into the trap, please share your experiences to scare off potentials victims!