Budgeting For Students: Should You Get A Credit Card?

What’s the point of having a credit card? Who can get a credit card? How should I use my credit card? All of these questions come to mind when considering getting a credit card. You have to be 18 years or older to be eligible to receive a credit card. There are many reasons to get a credit card, however too many times we hear that people are in debt and owe to the bank because they cannot pay off their credit card. I will explain the proper ways to use a credit card and how to stay out of debt!

Why Should I Have A Credit Card?

Having a credit card starts your credit history which is important for your future. Credit history allows you to borrow with the bank, for example when you’re ready to buy your first house or apartment you will have to get a mortgage with the bank which requires you having credit history. A credit card will allow you to build that credit history over the years, as long as you pay it off on time and don’t go over the limit.

The reason many people go into debt is because they spend more than they have. That’s why it’s important to have a low limit amount on your credit card, for example $500 – $1000 limit is plenty for a student. Try not to spend what you don’t have in cash, otherwise it will be difficult to pay off what you’re owing. Try using your credit card on big ticket items, such as a stereo, lap top, college books, etc. Try not to use your credit card for little purchases such as gum, bus tokens, use your debit card instead. The reason is these little items add up and it becomes harder to budget when you owe more than you have!

How Do I Pay My Credit Card?

It’s easy. Payments can be done online, at your bank or via your bank’s ATM machine, most banks have an app for your smart phone too. You will receive a statement every month telling you how much to pay and the due date. Your statements can be received online too! Make sure you pay before the due date to avoid interest charges. Interest is something the bank will charge you if your payment is late.

Why Else Should I Get a Credit Card?

If an emergency happens and you forgot or lost your debit card, have no cash handy a credit card may save the situation. You can simply pay it off later. Emergency money is always good to have, and that’s when the credit card comes n handy. Simply keep it in your wallet for just in case!

What Types Of Credit Cards Are There?

Mastercard, Visa, American Express are the main types. They all have the same purpose. Payment agreements may differ, always ready your credit card agreement before applying for one.

Category: BorrowingCredit CardsStudent FinancesTips and Advice

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Article by: Anna Suzdenkova

Employed in the financial sector for over 7 years. Held various roles including financial advisor, auto claims adjuster and manager of customer service. Attained an accounting degree with Honours. Mutual fund licensed. Passionate about helping people. Forever an optimist, positivity is the key to a happy life. Enjoys helping people decipher the banking world and use it to their advantage!