Think before pulling out your plastic

It’s easy for most people to spend money that does not belong to them.

Photo courtesy of wisemajictatoo.com

Many Wake Forest students have been trained as pros when it comes to their parents’ credit cards.

I, myself, procured a Discover Student credit card nearly two years ago: “Caroline K. Murray” stamped on a shamrock-clad, three-and-a-half-inch sliver of glossy plastic. A big girl toy, as my sister had once referred to it.

But great power comes with great responsibility.

A credit card is like your alcohol: not understanding the effects of its use can be dangerous and lead to irreparable repercussions.

After building up my credit for the past year and a half or so, I’ve learned that there are non-negotiable guidelines one must follow in order to protect one’s financial status and ensure stability when using a credit card on a regular basis.

 

Do your homework

Before the CARD Act of 2009, credit card marketers could hook students into applying for dozens of credit cards simply by offering free pizza or T-shirts — things that we college students can’t get enough of. Blind recruitment was how these companies thrived… and how they took advantage. If you’re applying for your first credit card, research your options thoroughly.

Look for things like APR rate, student benefits, annual fees, grace period length, rewards, balance computation method, etc.

If there’s anything that Wake Forest taught us in our four years, it’s how to research.

Pay your bill. In full.

Every month. Period.

You want your credit as high as Spicoli? Then this would be considered the Golden Rule. Don’t pay your bill on time? HUGE credit score hit.

Granted, you can get away with making the minimum payment on time every month, but doing so over too long of a period is a red flag to lenders. It is very simple, uncomplicated and straightforward.

As Nike commands, just do it. If you cannot do this, call the company before payment is due, and they will work with you.

Save receipts and track transactions

One of the biggest wake-up calls I received after procuring a credit card is that I was solely responsible for cross-checking every transaction to spot potential errors in my billing statement.

It happens a hell of a lot more often than we’d think.

Keep all your receipts and monitor your transactions so that everything matches up with your bill.

If there is something on your bill that shouldn’t be there, call the company and point out the error. They sure as hell won’t do it for you.

Avoid the “revolver” trap

The most advantageous customer for credit card companies are those who make minimum payments, always carry debt and who make new charges almost immediately after paying off the full balance.

Companies make bank off of interest rates and random fees for these kinds of customers. To avoid this problem, only use credit cards for transactions that you can afford, curtail your wants and exercise discipline.

Carry one or two cards max

The more credit cards you have, the more debt you accumulate.

Also, it is more difficult it is to keep track of payments, and the easier it is to be a victim of fraud and identity theft. One or two cards is more than enough to establish respectable credit.

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