Knowing how to manage your money is tricky because you will have several different expenses, and not that many sources of income. If you decide that you will need the assistance of a line of credit, then you're going to need to make sure that you know a thing or two about credit cards. If you are already relying on student loans, then you don't want to leave yourself with an insurmountable amount of credit card debt in addition to your student loan debt when you graduate. In a perfect world you could avoid college debt all together, but since you can't, you're going to need to know the basics. Here's how to avoid too much college debt.
Don't Open More Than One Credit Card
When you're in college, especially if you go to a competitive school like Boston University, it will be very easy to get a credit card. In fact, the credit card companies will be targeting you and trying as hard as they can to get you to open as many lines of credit as possible. However, it's very important that you don't take on more than you can handle. You should open just one credit card at first and then wait until you graduate to take out another one.
Apply for the Smallest Credit Line
The credit card companies will also try to give you larger lines of credit than you need. As tempting as it may be to take out a $2000 line of credit, you should start with no more than $500. This will be enough to get you out of a jam if necessary, but not so much that you will easily get yourself into trouble.
Choose One Expense for Your Credit Card
One of the easiest ways to manage the spending on your credit card is to choose one regular expense to put on your card so that you know how much you will be spending each month. Whether that be groceries, gas, your energy bill, or coffee, you want to make sure that you choose one expense and stick to it.
Never Spend Too Much
A lot of people think that the amount of their credit limit is how much they are allowed to spend before their credit card is considered maxed out. Unfortunately, the credit card companies will consider you maxed out once you spend more than 50% of your limit. However, if you want to maximize your credit score, you never want to spend more than 20% of your limit. You may have a lot of expenses if you are a graduate student earning VU's MBA degree online, but you are going to have to practice a lot of self-control either way.
Always Pay Your Bills in Full
You are going to have months when it will be very tempting to just pay whatever the minimum on your bill asks you to pay. Although, not only will this be reflected in your credit score, it will also mean that you will eventually be paying much more in interest. That's why you should always pay your bill in full every month.
