Credit card companies have become stricter in issuing new accounts since the start of this country’s recession. Those in universities lament that it became harder to apply for student credit cards. Even those who are credit-worthy are not easily given the chance. I hear a few students complain, saying, how can they ever be able to build a credit rating for themselves when financial institutions are not giving them a chance to even own a card?

I remember having to piggybank with my parents account years ago. It meant they co-signed my application and became jointly liable to the use of the plastic. That was how I got to establish my credit because my parents also had a high credit score. Now that my half-sister is requesting for her own account, the processing is different especially that this new FICO law changed some ruling and will take effect in February 2010.

Credit card companies though have become aware that youngsters would need their own credit card. They will still offer student credit cards for those who qualify. These cards have reasonable interest rates, low limits, and requirements are attainable. Issuers like Citi and Discover are the frontrunners in issuing student credit cards.

That being said, the problem does not lie anymore on the difficulty to acquire, but on the fact that most young people tend to mishandle finances. This is a reminder not only to students, but to all parents out there to educate children about money. First and foremost, student credit cards should be taken seriously. It should still be considered money and must be used sparingly because, obviously, it does not sound right to be spending money that you do not have.

Here are some tips in using plastic the smart way:

1.    Treat a card like cash, only bringing it out because you do not want to carry wads of cash with you. Therefore, charge purchases only if you have cash to pay for it within the grace period.

2.    Pay off the total amount you charged each month. You do not want to be deep in debt because of finance charges and interests. Equally important: never miss a single payment!

3.    Never go beyond your limit. It is given to make you understand that in reality that is all you can afford to pay off. Experts advise that it is better to let, at least, 50% of your limit always open.

4.    Find a card that will not charge an annual fee. Issuers already earn when you use a card, so there is no point for them to charge more.

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