Coping With Credit

By Debbie Wilson
LoanPage.com Columnist

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Credit cards can be one of the biggest sources of financial trouble for college students. Soon after you leave home, credit card offers will begin to flood your mailbox. And while these offers can be tempting, when do you know it's right to sign on the dotted line?

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Establish Credit History

It's important to establish and build your credit history so that later in life, when you're purchasing a car or a mortgage, you'll have a history of financial responsibility. But before you sign up for the first credit card offer that comes along, shop around for the best terms and don't spend more than you can afford. Consistent payments can build solid credit, something that will be helpful in boosting your credit rating and help you get future loans.

Not All Credit Cards Are Created Equal

In addition to comparing monthly interest rates, annual fees, and late charges, many companies will try to tempt you with a teaser rate. These rates typically expire within a few months, leaving you stuck with debts beyond your budget. By reading the fine print carefully, you can avert credit card disaster and help consolidate your debt effectively.

Credit Is Not Free

Remember that purchases you make with a credit card are actually loans. You need to pay them back, on time, with interest. Mistakes don't just go away. If you miss a payment, a negative mark will appear on your credit rating, making getting a mortgage difficult. So use smart spending habits.

Limit Your Credit Cards

The more cards you carry, the more debt you're also likely to carry. Start managing your finances by developing a budget. Consider opening a checking account where you can also get an ATM or debit card that links to your funds.

By managing your finances and developing a solid credit history, you too can be a financially fit individual!

About the Author
Debbie Wilson owns and operates a lakeside resort. Her previous experience includes profitability consulting for a national healthcare company. Debbie holds a B.A. in Business Management with a minor in Physical Education.

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