A college education is becoming more and more
expensive as time progresses. With student loans becoming a major debt
crisis for many, the added problems from student credit card debt will
only compound the headaches and financial problems in the years that
follow graduation. However, a student credit card still provides a
decent means of building good credit. If you're lucky enough to be
approved for a new shiny piece of plastic, here are 7 tips to help you
avoid student credit card debt while you're still in college:
1. Eliminate Unnecessary Expenses
Whether you're saving your receipts, or going down your monthly statements, highlight any unnecessary expenses. If you're having trouble determining what constitutes an unnecessary expense, here's a list of commonly overlooked items:- Expensive coffee purchases: invest in a thermos and start brewing your own stuff at home.
- Energy drinks: waste of money and potentially bad for you. Drink more of that homebrewed coffee.
- Magazines: just spend time reading magazines in a bookstore or online.
- Expensive clothing: in college, you only need clothing to cover your naked body and keep you warm. New, fashionable clothing items are a luxury outside of your spending limits.
- Dry cleaning: if you have no more expensive clothing to deal with, you shouldn't have anything to dry clean. That's two birds with one stone!
- Movies: it's cheaper to rent a DVD, and besides, you should be studying more.
- Satellite or cable TV: again, you should be studying.
- Video games: should still be studying.
- Expensive grooming products: taking care of your body and appearance is important, but if you have to resort to your student credit card, you probably shouldn't buy it.
- Dining out: food is a necessary expense, but it becomes an unnecessary one when it has to be served to you in a sit-down restaurant.
2. Create a Monthly Budget
Now that you've eliminated any unnecessary expenses, create a monthly budget that includes necessary expenses, like housing, utility bills, food, gas, insurance, book fees, school supplies and parking permits. Once you've created a list of necessary expenses, determine what you can afford on your own, and where you might require some assistance from a student credit card. Only use your student credit for any of these expenses if you have absolutely no other option.3. Save the Credit Card for Emergencies
Your student credit card can be looked at as a last resort for making an emergency payment. No, an emergency expense does not include a trip to the movie theater or a $6 cup of coffee. Plan on using the credit card for dire emergencies, like:- Unexpected car repairs
- Prescription medicine, hospital visits, copay and other medical related expenses
- Emergency housing repairs
- Any bills that charge hefty penalties for late payments
- Miscellaneous fines, like a parking ticket