Three Credit Card Traps to Avoid
By many accounts, credit cards ARE a trap to avoid. If you’ve already got a card though, or think you’re ready to take on the responsibility of one, here are a few tips help you keep yourself from going in the wrong direction.
1. Avoid sign-up gimmicks. Card companies often partner with restaurants, clubs, and other businesses around college campuses to offer free stuff to anyone who fills out an application. They know that something as simple as a free lunch or teeshirt can be a big draw for students. Don’t fall for this! Even if you don’t care whether or not you are approved for the card, filling out an application for one is not something that should be done lightly. You may find yourself looking back later and wondering when it was that all your debt problems started.
2. Don’t sign up for store-specific or gas cards. If you use a credit card during your college years, it should only be for emergencies. A card that is only good at your favorite department or electronics store is not going to help you if (for example) your car breaks down on the way back from a visit home. Cards issued by gas station/convenience store chains have another drawback as well. With no end in sight to ever-rising gas prices, relying on a gas card can be a fast way to creating big debt problems for yourself.
3. Don’t use a credit card when you have other options. If you have a card, it should only be used for emergencies, and as a temporary measure. If you need money for educational expenses, make sure you are taking full advantage of the financial aid and other resources you have available. If what you are about to pay for with credit is not an educational expense, stop and think seriously about whether or not you really need it and remind yourself that you should be paying off the full balance of that card every month.