And some practical advice too!

My first credit card

I remember my college days when it seemed there was a credit card advertisement on practically every bulletin board on campus. The banks would travel to the college and set up application booths on registration day. Hundreds of students would apply for a credit card. As an enticement, we were offered freebies like T-shirts, water bottles, and key chains. So I took whatever they were handing out. You cant beat free. The next thing I knew, I had signed on the dotted line. It wasnt long before that little plastic card arrived in the mail. It was time to establish my credit history. I was off to the mall. Life was good!

Stuff happens

I made my student credit card the solution to all my financial emergencies when I attended college. Needless to say there were plenty of them. There were tuition bills, school supplies, car repairs, and midnight pizzas to pay for. The old saying was true. When theyve got you, theyve got you. That little piece of plastic bailed me out of more financial predicaments than I could count. I honestly dont know what I would have done without it. The student credit card thing was a pretty cool idea.

My day of reckoning

The monthly statements arrived one after another. I had been in the habit of making the minimum payment and ignoring the bottom line. Not a good idea. All those credit card purchases left me with a pretty hefty balance. The finance charges were mind-boggling. It was time to take action. I started to allocate more of my monthly income toward my credit card bill and phased out frivolous purchases. My balance actually began to dwindle (Thank God). I developed a better understanding of what credit cards are intended to be. Theyre certainly not free money! Put simply, theyre a convenient loan that has to be repaid.

A word to the wise

When applying for a credit card, students need to consider the fees involved. Take a hard look at the finance charge, annual fee, and late payment fee. Shy away from cash advances if possible. Consider a low limit credit card. Do a comparison and search for competitive rates. Study your card agreement thoroughly. If you dont understand something, call customer service. Ask questions.

Set up a realistic budget and follow it closely. Avoid impulse shopping on your credit card. Try to use the card only in real emergencies. Try to pay your bill promptly and keep your finance charges to a minimum. This will help you to establish a good credit history.

You may also want to consider using a debit card. The money is deducted right out of your checking account. This way you cant spend more than you have.

Remember to approach credit cards sensibly. When used properly, they can be a real lifesaver!