Managing Your Credit Card Balance
Student credit cards can make your financial life easier. They can also lure you sweetly into debt hell...
The two cardinal credit card sins:
- Not sticking to budgets
- Buying things on credit that you wouldn't pay cash for
Many people have come up with many solutions - not all of them involving rich, crusty spouses or breeding rare emus. Here are a few quick points...
Sticking to a budget
Budgets is a dirty word, but sometimes you just have to muck in. Start with a list of expenses:
- electricity and phone bills
- transport (public and/or your car)
And add a little living:
- eating and drinking
- savings/contingencies (some people like to put money away for holidays, emergencies, or emergency holidays)
Once you know where your money's going, you can spend the rest on clothes or gadgets. (Or put it into a high interest student account to save up for some really special clothes or gadgets.) Now all you have to do is stick to your budget.
Spending money you don't have
Ah yes, what would student life be without reckless drinking, reckless dating and reckless debt? That said, there's a fairly simple rule which eliminates the worst of our impulse buys: "Would I pay cash for this?"
(Note that "I don't have enough cash" is a "no".)
According to various studies, we're much more likely to spend up - particularly on discount items - when we can whisk them away on credit rather than stump up the cash. If that sounds like you, it's time to consider student debit cards, which have many of the benefits of credit cards (online/phone purchases) without the debt - they're limited to the money in your student account.
Do you have any words on student loans, oh wise one?
Proceed to the parable of the personal loan.