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Along with your academic requirements, managing your credit is an important lesson to learn in college. This is the time when a lot of people start building their credit reports. Here are some ways to manage your credit while you are in college so you can graduate with financial know-how to help you achieve your future goals.
Plan your student loans wisely
Even though it is probably inevitable that you will graduate with some debt, student loans are considered smart debt because going to college makes you more employable. You can shop around for the student loans with the best rates and terms so you can best manage your debt. You might also want to look into the best repayment options for you. From the time your student loan is disbursed, you will start to owe interest. You can choose to either make interest-only payments from the beginning or you can choose to let the interest accumulate and then start paying it once you are out of school.
Find the right credit card for you
A good way to start building your credit is with secured credit cards. Secured credit cards let you borrow an amount of money that you’ve deposited with the bank as security. You can also look into getting charge cards which don’t allow you to carry a balance on your account. That way, you can get used to paying in full each month, and you can start budgeting your money and your schedule accordingly. These cards usually have low limits but, over time, your credit limit can grow and you can establish a strong credit history. When you move on to other types of credit, you will have cultivated good habits for managing your credit
Manage your credit cards
This is where a lot of people get in trouble in college. “Buy now, pay later” can be very tempting, but it can also keep you from achieving your financial goals once you graduate. It is essential that you make your payments on time and that you make at least the minimum required payment. Otherwise, your credit score can be negatively impacted and that can make it harder to get other types of credit and loans. It can keep you from getting the best interest rates available on car loans and mortgages. It can even make it harder to get a job once you graduate.
College is also a good time to talk to a representative of your bank or a trusted and financially knowledgeable family member. Remember, the best step you can take toward having a positive financial future is to build a strong foundation. Your credit is serious business and it is critical that you learn to manage your credit well from the start.