5 Common Credit Card Mistakes Students Make


NEW YORK – May 3, 2022 – (Newswire.com)

iQuanti: If you’re a young adult, you might be wondering: when can I get a credit card?

Technically, anyone 18 or older can apply for a credit card. However, without the proper guidance, they risk making mistakes that could damage their credit history for years to come.

To avoid unnecessary risk, take a look at five of the most common credit card mistakes students should strive to avoid.

1. Not taking a new credit card seriously

A new cardholder should always view their credit card as a huge opportunity to potentially boost their credit rating. Also known as your FICO score, your credit score is a number between 300 and 850 that can determine your creditworthiness.

This number can not only determine whether you can apply for future credit cards, but it can also affect your eligibility for:

  • Rental of apartments/houses
  • Mortgages
  • Car loans
  • Other types of loans
  • Certain insurance products

As you can see, what you do with your credit card can impact your ability to take bigger financial steps in your future. That’s why you should take a new credit card as a serious chance to prove that you can use credit responsibly.

2. Not making credit card payments on time

Neglecting or even forgetting to make credit card payments is one of the worst decisions you can make for your credit score. A lender will most often want to know if you will repay it in full and on time. That’s why about 35% of your total FICO score can come from timely payments.

To avoid missing payments, set up your account for automatic payment. By enabling this single account feature, you’ll likely never miss a payment, and your credit score may not have to decline unnecessarily.

3. Carry a card balance

Credit cards can let you make purchases you can’t pay for directly and pay them back later. But new cardholders often don’t understand that after the first billing cycle, any outstanding balance can be charged at a daily interest rate. This interest can be based not only on the principal, but also on any interest charged so far.

To potentially avoid interest charges altogether, always pay your statement in full. There’s even a setting for this in Autopay.

The other trick is to always spend less than you can afford. This way, you will have the assurance that you can always repay the full amount.

4. Charging too much on your credit card

Even if you can afford to spend as much as your credit card allows, it can have a negative impact on your creditworthiness. About 30% of your FICO score can be determined by “your credit utilization rate”. It’s the amount of your balance divided by your credit limit, and it gives a picture of how much available credit you’re using at any given time.

You should try to avoid spending more than 30% of your credit limit. For example, if your credit limit is $5,000, try to keep your balance below $1,500.

5. Asking for too many cards at once

Having more than one credit card may seem like a good idea. However, asking for too many cards in too short a time can negatively impact your FICO score. Instead, wait about 12 months before applying for new cards.

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5 Common Credit Card Mistakes Students Make


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