Often, the opportunity to get that credit card for the first time comes when we’re attending college. Numerous credit card companies target the college crowd with attractive credit card deals. They may not be the best deals for low-interest rate credit cards, or even those coveted zero percent credit cards, but it’s a great opportunity to get an instant credit card before entering the “real world” after graduation.
Many people wait until after graduation and have secured a job before applying for credit. Although it may seem like a wise decision to wait, it may not be so cautious after all. The main reason for this is that the student will need their parents to co-sign and the lender institution is offering credit based on the parent’s credit rating. If a college student waits until after graduation and landing for their first job, they will not have enough credit rating to qualify.
Also, if the student can’t pay their fees, because the parents are usually the co-signers of their child’s account, the financial institution is more confident that the parent will pay the bill. Therefore, when applying for and getting a credit card while you are still in college, both the student and the bank earn!
There is a big drawback to getting financial support while you’re still in college: there’s a temptation to borrow because access is “so practical.” But, if the student can use their credit card wisely, they can enjoy the convenience that comes from having one and building their own credit score at the same time. It will be much easier to get the first approved car loan or even financial backing for a home loan after graduation.
When a college student can apply for the VISA card and then use it self-control while still in college, they have a lot more chance of accessing future credit needs after graduation than those who don’t take advantage of this option while they’re still in school. It’s really a wise thing to be able to build a little credit history before you graduate.
However, make sure you are prepared to pay your charges in full each billing cycle. Also, don’t be tempted to raise the card limit; you will find a more difficult ‘hoe row’ when the bill comes due to paying in full. In addition, you must give in to this temptation, and only make the minimum payment, you will be placing most of that payment on interest charges each month. This will result in it taking longer to pay off the balance, and this could jeopardize your credit rating over the line.
To avoid this possible pitfall, do not buy any non-essential items. Try to remember that if you can’t afford to pay the bill in full when it’s sold out each month, you can’t afford to make the purchase. You’ll just want to use your debit card to make essential purchases. Remember, you have the card for one reason only: to set a credit rating that will be there after graduation.
When you stay true to this fact then, after graduation with a good credit history, you can consider trading on your credit card of greatest interest for one of those 0 APR cards and have a great chance to get it. You will be able to effectively take advantage of the lowest rates and thus reduce the interest rate you have on your current credit card.