Tips to Manage Your Credit Card and Credit History Wisely
Friend of mine (new to USA) was asking for tips to manage credit cards. He got Discover Credit Card (for student). He would use the card to make a purchase, pay the balance the same day.
So, he would spend $30 in walmart for Groceries using the Discover Credit Card. Then come home and pay $30 to Discover. I told him, I would write some tips to manage credit cards and credit wisely.
If you haven’t applied for a Credit Card, then read this post first – How to Build a Rock Solid Credit History in 1 Year.
After reading the above link, you can read the following tips to manage your credit cards wisely.
Tips to Manage Credit Cards
- Avoid applying for credit cars with high interest rates.
- Look for credit cards with low interest rates and no annual fees.
- Don’t spend the money that you cannot afford.
- Stay within your credit limit. Track your credit card transactions and charges frequently.
- Always have a budget. Don’t use your credit card to buy items that you really cannot afford to buy. [100 Money Saving Tips]
- Understand the terms of service before applying for a credit card.
- Don’t apply for credit cards when it comes with free offer. Free with credit card most of the times comes with some catch.
- Pay your credit card bill on time.
- Pay your credit card bills in full. Carrying balance in credit card implies you have spent more than you can afford.
- Students will not have huge monthly income. So, know how much you have in bank account (or income) and spend carefully.
- When you make a purchase using credit card, check same amount is reflected in the online account.
- Limit the number of credit cards.
- Don’t use the card, then come home and make immediate payment. Wait for monthly statement, then pay the amount in full.
- Request a Free Copy of Credit Report at annualcreditreport.com and make sure information in accurate.
- Pay the Credit Card Bill on time, else you might have to pay additional fees.
New students in USA will be usually exited to get credit cards. But, limit the excitement to max 2 credit cards till you graduate.
When you get a job, then apply for a credit card that suits your need.
Hi HSB….I must say that your website has very useful information….keep up the good work…I have two questions….I am interesting in finding out my credit score….which of the three credit bureau companies should I try first?….Can you enlighten on the differences between credit score and the FICO score, and the importance of each?
Hi HSB,
I was keeping a close watch on your credit card forums and a question popped. What is the best time to apply for a credit card?? Few of my friends say right away since i got my ssn a week back and others say get your first pay check and then apply in order to get high amount limit.
If you have a job and getting paycheck, then apply when you get your paystub or right after you get the job.
If you don’t have a job, then go ahead and apply with SSN.
Thanks for the quick reply.
One last thing , are all credit cards valued the same? I mean i am getting approval from Capital One , but few seniors say that bank has less value and that I should go for BoA only. Whereas few local friends are saying it does not matter , just grab whatever you get , as you can make credit history with just about any card. I am soooo confused. I am a new student and dont want to land in trouble and end up paying some kind of extra fees later.
will the good credit history from my home country have any effect on offers,annual payments,limit?
Nope. Its doesn’t affect your credit history in USA.
Thanks a lot HSB for all this info !!!
But is it so necessary to get a credit card before completion of MS ??? Usually stipend or RA which students get is less, it these cards are used more than the current amount then it would definitely create problems !!! 🙂
Also Many banks are offering account opening rewards like 150$ . Is it good to open Many bank accounts . Will that affect the credit history
hi,
For student , Banks like Wells fargo and Bank of America are only issuing secure card, Will that be a problem. Also the point ” Don’t use the card, then come home and make immediate payment. Wait for monthly statement, then pay the amount in full”. How will that affect us. Also they told it will reflect in bill only after a week , is that true.
Secure card is fine to start building your credit history.
When you use the car, you will an entry in the transactions. But statement is generated once per month. You will have about 20 days to pay that bill.
Example – You spend as follows for a given month
Walmart $10
SubWay – $5
McDdonals – $2
Walmart $40
Your statement at end of billing period will be $57 and you will have 30 days to pay $57.
If you don’t pay within that 20 days, then banks will charge you interest for that money. How they charge he interest will be in your Terms.
So, pay the card when you receive the statement for $57.
Not like this.
Walmart $10
Pay $10
Subway -$5
Pay $5
Got it?
I’ve just applied for CapitalOne student card and got approved. I may receive it within 10 days. Initially they granted me only $300 limit. Never mind. I need it to build my credit history.
Credit limit is not an issue. You can request limit increase after 5 to 6 months of usage.
y is it imp to buy the credits
Hey Thanx HSB…got a new credit card…so these tips will really help…I guess I’l be indebted to u throughout my grad studies 🙂 But, Im not really someone aware of these stuff…so it would be gr8 if u explain something about the interest thing…I know Im being a bit too demanding..but it would really help.
Credit Card Interest Rates?