Maintaining Credit With a College Student Credit Card

by : Jon Arnold

There are a surprising number of students in college these days who do not have a credit card in their own name. This is a huge mistake and can make life after graduation even tougher than it needs to be, especially in today's very competitive job market.

Why is that? Because credit is something that needs to be firmly established and maintained in order to do just about anything these days. After graduation, you are going to have a whole new set of problems to resolve, like finding a job, finding a place to live, perhaps relocation, and if you wait until that point in your new life to begin establishing your credit history and credit score, you are going to be way behind the eight ball.

Remember that a credit score is used for much more than just to be approved for a car loan or a new account at a department store. More and more these days, a credit score and credit history are being used when applying for a new job. If multiple candidates are all equally qualified for a position, more often than not, the one with the better credit score will be the one who lands the job. Even if there are not multiple candidates for the job, you can be assured that a credit check will be run on you, and if you have NO credit history, that is a negative.

Or how about the fact that you are now off on your own and probably no longer listed on your parent's car insurance policy, so you need to get your own car insurance. Yes you guessed it, more and more car insurance companies are running a credit check on you to find out what insurance rates they should quote you. If you have bad credit or no credit, you can expect your car insurance rates to be "sticker price".

Be aware of what is going on in today's world with credit histories and credit scores and get a jump on the game. When you are in college or even before then is the best time to get a credit card in your own name that you are solely responsible for. In addition to establishing your credit, it will also teach you financial management.

From the financial management perspective, you need to make sure that you pay at least the minimum payment each month on time. If your payment is due on the 10th, do not mail the payment on the 8th and expect to not be charged a late fee. It takes several days for the mail to travel these days, and once it arrives at its destination, it can take another day or two to be opened by the accounting office clerk and posted to your account. If it's not posted by the due date, regardless of when you mail it, it is late.

Keep your credit card account in good standing and that will be your best asset to establishing and maintaining good credit. Be cautious of where and when you use your card, since the temptation will be to "impulse buy" because you have "free money" via your credit card. It is NOT free money, and the first time you get a statement showing how much interest you paid, that fact will hit home fast.

Getting your credit history and credit score established when you start college or even before is the best way to have a jump on this very important part of your life. It takes work to maintain a good credit score but doing so will pay off in spades in the long run.