Credit cards:

Use with caution!

Tuesday, April 7th, 2009

Moving away from home and into residence certainly has its perks: no longer having to follow the rules of your parents and meeting a whole new set of friends. However, living alone also comes with responsibilities, including managing your own money.

In particular, one challenge many students face is how to manage a credit card. When used correctly, a credit card can be a reliable outlet to defer small payments and establish a credit rating for future purchases.

When used incorrectly, a credit card is a sure way to rack up debt, jeopardizing your chances of buying anything substantial in the future.

Luckily, the great minds at The Gazette have devised a few schemes to ensure you won’t have to pull out the scissors on your brand new VISA by Homecoming.

1. Set your own limit on monthly expenditures. While your credit card company may give you a limit of $500 or $1000 to spend every month, it is best to set your own personal limit slightly below this figure in case a financial emergency calls for an unexpected purchase (note: this ‘emergency’ does not include purchasing the latest edition of Madden for your Playstation).

2. Keep a record of all of your purchases. While it may be tedious, keeping track of your purchases each month will improve your chances of sticking to your monthly goals and deter you from buying an extra pair of Lululemon pants for the gym.

3. Use your card for specific items only. If you don’t initially trust yourself with a card but are determined to build up a credit rating, try and use your card for specific purchases only. For example, if you have a vehicle, use your card for gas each week and keep your card in a safe place at all other times.

4. Don’t carry your card everywhere you go. Having your credit card with you at all times can increase your urge to use it frivolously, particularly when you are at the mall or out at a restaurant. If you know you may crack, keep your card at home when you visit such places.

5. Do not use your card at the bar. Buying rounds of shots for people at the bar 'on your [credit card] tab' can be a great way to make instant friends. It can also be a great way to quickly max out your limit " and not even remember doing so the next day. In order to avoid calling your parents to make up for $300 worth of prairie fire shots, keep your card at home when you go out.

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