College is one of the most memorable moments of our lives. College students get into college and finally feel the tinge of freedom looms all over since the first day of the first grade. For the first time, college students get to be away from their parents and any watchful eye of family members. College is a moment where students are free. College students get to taste real independence and work around making a future for ourselves. Nonetheless, this experience comes with various challenges. A primary problem is the management of personal credit. The control of personal finances can either make or break a college student. The choices they make at this level have numerous repercussions on their future life. Below are some of the common credit card mistakes a college student ends up making.
1: Ignoring Credit
Credit may prove quite essential if well managed. Students, upon graduation, need to get jobs, start families, buy cars, or get a mortgage. Not all these durable goods and plans are attainable solely from a month’s paycheck. It is thus essential to take on some credit to help pay for these goods and services. However, if they have a poor credit rating, then it might be impossible to use credit to their advantage. Students should, therefore, stop ignoring the loan and use credit to build better credit scores. A better credit score is good because it allows one to use credit to achieve possibly anything and pay back the loan in time. Students should, therefore, face the reality that credit exists and use it responsibly.
2: Missing Payments
When students use credit cards, they must repay that debt. However, quite often students have too much work, ranging from Rogerian argument papers, book summaries (i.e. A Very Old Man With Enormous Wings summary, Bartleby the Scrivener summary, etc.), term papers that students need to write following various writing formats, homework submissions, to midterm and final exams that keep them busy and forgetful of some of their pending payments. The missing of payments, however, comes with penalties. These penalties increase the cost of credit making it less desirable. Moreover, accrual of further penalties may lead to lower credit scores that limit the ability to use credit. Students should, therefore, have reminders in place to avoid missing credit card payments.
3: Running up Credit Card debt
Credit, as noted earlier on, is essential if well managed. Missing payments, thus, lead to the accrual of more liability. As one runs up more credit card debts, then they might get in a situation where they are in a continuous cycle of debt repayment. Moreover, they might have to sell off some of their consumer goods to pay off the debts. To avoid such, students should pay up their credit in time.
4: Financial Budgeting
The creation of financial budget limits impulses spending on weekends and a visit to the mall. The failure to plan is planning to fail. Students should, therefore, have and strictly adhere to their financial plans. Moreover, these plans help them track their spending and cut back on unnecessary credit spending.
5: Failing to understand the terms and conditions of the credit firm
Every credit card comes with a set of rules and regulations that guides its use. The violation of these terms comes with various penalties. To avoid penalties and accrual of much interest on their cards, students must pay up their credit in time.
The number of credit card mistakes is limitless. “College students seldom realize the weight of credit card debt until when they present challenges in their future lives,” says Senior Financial Consultant at Popular Quotes and SwiftPapers.com. Credit card mistakes directly affect a graduate’s net worth and the ability to access such financial services as loans and mortgages. Regardless of the error, credit card debt is something that students must try to alleviate. The common credit card mistakes that students make, thus, include ignoring credit, missing payment deadlines, accumulating enormous credit card debts, failure to set a budget, and failing to understand how the APR works.