As a student, getting your first credit card can be exciting because it equates to money and freedom. However, using a credit card without knowing all the facts can lead you into financial disaster, ruin your credit history, stain your credit report, and lower your credit score. You need to acquire the knowledge of how credit cards are used to either build a good credit history or destroy one's financial reputation.
These basic tips can help you use credit cards responsibly and to your advantage:
- Use credit only if you are able to pay the debt back, in full and on time.
- Do not charge on impulse purchases.
- Only use your credit card in cases of emergencies that might prevent you from getting to your emergency fund, such as during travels in the U.S. or abroad.
- Say "NO" to opening numerous credit cards as it might affect your credit rating.
- Review your yearly free credit report from each of the three major credit agencies to verify accuracy of information on the reports and to prevent identity theft. You are entitled to a free copy of your credit report every 12 months from each of the three nationwide credit bureaus.
For more information on credit card reports, go to annualcreditreport.com or call toll free 1-877-322-8228 to order the free reports.
The information about credit cards has been drafted from Penn State's Financial Literacy and Wellness Center.