I know credit cards can be really bad, when they’re used wrong.  As students, though, you’ve got so many great opportunities for good student credit cards that offer outstanding rewards programs and reasonable interest rates, that if you just learn how to use the effectively, you can enjoy the freedom they give you and build your credit at the same time.

Around the holidays, money can be a little tight, especially for the typical student who probably doesn’t budget all year for the holiday season!  Using a credit card to purchase gifts for family and friends is ok as long as you figure out how much you can afford to spend (and pay off in a reasonable amount of time).  To do this, you’ll want to create a budget. 

On a piece of paper or in a spreadsheet program, write down all of your monthly expenses on one side, and all of your monthly income on the other side.  Determine how much money you have to spend each month, and then you can figure out how much you can reasonably afford to put on a credit card for holiday shopping, and pay it off within a specific number of months.

To make your holiday purchases better on your cash flow, look for a credit card with a good rewards program.  There are rewards programs that give you all sorts of benefits just for shopping with your card, including, but not limited to:

• gas rewards programs
• cash back
• entertainment rewards programs
• travel rewards

Whatever you think would benefit you most is the type of credit card rewards program you should look into.  If your current credit card doesn’t offer you a rewards program, consider opening a new one, and transferring any old balances onto the new card so that you have just a single payment each month. 

The best part about using a credit card over the holidays to get your gifts or pay for your tickets to travel home; is that as you make your payments on time each month you are establishing a credit history.  The longer you make payments and the longer you make the payments ON TIME, the better your credit score will be.  Using your college years to generate a strong credit score makes sense, as then when you graduate you’ll have a good score for when you’re ready to purchase big ticket items- like a new house, or a new car.

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• Cash in on Holiday Spending with a Rewards Credit Card