Wouldn’t it be nice to have some of the money you spend end up back in your pocket while also creating a financial identity that will benefit you for post-graduation life? Investing in a credit card is not all bad if you know what you are doing.
Even if you have a low credit score or no credit score at all, there are still a variety of financial lenders that will provide you with an opportunity to create a solid financial identity. Though there has been a restriction on the issuing of credit cards to people under the age of 21, this hasn’t deferred people from expanding their credit.
There are several credit card providers that offer cards geared towards students building their credit. There are even some credit cards that offer rewards for using their card. These cards offer anywhere from 1 to 5 percent cash back for every purchase that you make, and over time it could really add up.
It is important to stress that having a credit card is not free money, and interest rates can be exponential, especially if you have a bad credit score or don’t have one at all.
A great way to use a credit card is on your fixed costs, which are the costs that you were going to have to spend per month regardless, like utilities, gas and food. By paying your fixed costs with your credit card and then paying the credit card off at the end of the month, you begin to accumulate rewards.
For instance if you have a credit card that offers 2.5 percent cash back and you spend $600 on your credit card per month, that amounts to an extra $15 per month. If you do this over the course of the year, you will have made a profit of $180 for simply using your credit card rather than your debit card. Making timely payments for the exact balance you owe is important as well.
By paying your bill on time, it allows your credit score to skyrocket and will make financing a car and finding a home a lot easier after graduation.
When money is tight, make what money you do have work for you.