Applying for a credit card in college is a great idea. Honestly it’s one of the best credit card tips we can give 20 somethings. That being said, good advice is relative. Advice can only be good if you use it wisely. How you use a credit card is up to you and if you use it a student credit card responsibly it can be a great stepping stone to bigger and better things like being approved for a mortgage when you want to buy a home and getting a loan when you’re ready to buy your first car.

Apply for a low limit

This is the first credit card tip to get you started off on the right foot when it comes to building your credit history and starting good financial habits. Applying for a low credit limit is a good idea for two reasons: it’s easier to be approved and it sets spending limitations so you can’t rack up too much debt if you’re tempted to spend.

Set a spending limit

Just because you have a $500 or $1000 credit card limit doesn’t mean you should spend it all, in fact keeping your outstanding balances below half of the entire credit limit is an important credit card tip. High balances can hurt your credit score and we’re sure you don’t want that.

Factor payments into your budget

Give yourself a realistic spending limit each month that you can afford to pay off and factor that amount into your budget to make sure your credit card balance is always paid off. Carrying a balance on your credit card costs extra money in interest payments and you probably don’t want to pay more than you half to. Most likely, you also don’t want to graduate with student loans and credit card debt on top of it.

Make payments on time

Even one late payment can hurt your credit score when you’re establishing a credit history. Make it a habit to set a reminder on your phone or mark your payment due date on your calendar to avoid late payments. Setting a spending limit and factoring payments into your monthly expenses are good credit card tips to help you avoid late payments.

Always pay more than the minimum

Have a look at your statement every month before making the payment so you can see your total spending during the month, know how much you need to pay and spot habits. The more you spend the larger you’re minimum monthly payment will be and the more you’ll have to spend to pay off the balance in full. Carrying a balance on your credit card costs extra money in interest charges; that’s why it’s a good idea to stick to a spending limit that you can afford to pay off and save on interest.

Know when to call it quits

If you get in over your head, don’t worry. There are solutions to help you get out of debt. Contact a credit expert who will help you set a budget, get on a payment plan, pay off your debt and start over. The good thing (if you can say debt is a good thing) about getting into debt in your 20s is that you’re young; you can learn from your mistakes and recover from the damage – and help is only a phone call away.

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