First Time Credit Card User

By Leni Parrish on February 3, 2010

Now that the country is ready to recover from recession, credit card use is starting to increase again. People are braver to swipe the plastic and manage their accounts properly. No wonder that my cousin did not really have a hard time applying for one of those student credit cards. To say that she is excited to touch her own plastic is an understatement. She has been gushing about the day she finally receives her card. Just a few months ago, applying for student credit cards was really hard, and even those who are credit-worthy were denied. My cousin is lucky that she was given the chance to apply and build a good credit rating for herself.

Years ago, youngsters needed to co-sign with their parents for an account. The parents become jointly liable to whatever happens to the card or misuse of such. Students were given a chance to establish own rating especially if the parents had high scores themselves. There is a new FICO law ruling that will take effect in February of this year and the processing will be a bit different.

Credit card companies have become totally aware that students like my cousin need a chance to have their own student credit cards. These are offered to those who truly qualify and have reasonable interest rates, lower limits and fairly attainable requirements. There are actually issuers who focus mainly on this type of card. I think my cousin was able to decide based on information she found in the internet as well as the pieces of advice she got from her elders.

My cousin will just have to take a crash course on the proper use of student credit cards. It is common knowledge that young people have a tendency to mishandle their finances, and we must guide her away from that trap. She must realize that it is never cool to spend money that she does not have.

Here are some tips that I listed for her:

·        Treat the card as cash which means never swipe it if she does not have the money to pay for it within the given period;

·        Never miss a single payment and always pay in full to avoid interests and late fees;

·        Keep at least 50% of your limit open, so obviously, going beyond the limit is out of the equation; and

·        Choose an issuer who will not charge annual fees.

Knowing my cousin who has been consistently getting good grades, I am sure she will be a responsible cardholder.

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