Is any event in life more bittersweet than graduating from college? It's a huge, coming-of-age moment that solidifies four (plus) years of studying, partying and ultimately (and hopefully) finding ourselves, not to mention thousands of dollars in student loans. It's also a right-of-passage into the real world for many of us, which essentially makes it a huge wake-up-call when it comes to financial independence.
Yup, Mom and Dad are either cutting you off financially or taking you back in as you regroup for the real world, post-studies. Odds are, there's a lot to consider as you get your act together now that you're on your own financially, not the least of which is building credit.
If you haven't started building your credit yet, or you have but you're not sure what you're next move should be, here are some quick credit card tips for the class of 2013.
- No credit? Get crackin'!
If you haven't opened a credit card yet and you're over 21 years old, now is the time to do so. Frankly, the longer you wait to open up a credit card, the harder it will be to get approved for an unsecured card. Not only that, auto loans and - later - mortgage approval will be hard to come by without a solid credit history backing you.
Don't apply for a credit card to run up a balance or to stick in a sock drawer - apply for a credit card to build credit. Use your new card sparingly, make on-time and in-full payments each month, and start amassing credit via your first card.
- Don't lean on your cards
If you're already a credit card user but are running low on funds, do your best to keep from leaning on the cards you already own to carry you month to month.
I can't think of a single person I graduated college with that had a ton of funds leftover. Saving money in college is extremely difficult, and I know more than a few friends that used their graduation party cash to pay that first month of rent. That's still an infinitely better idea than using a cash advance check from your credit card issuer. (Rip that thing up!)
Credit cards might seem like the best way to get from Point A to Point B now, but you could end up amassing some interest-heavy debt if you're not mindful of your balance.
Keep your expenses low and your credit card balance lower as you transition from college-living to everyday life.
- Don't be late
Finally, the easiest way to kill your credit history before it's hardly begun is to go late on your credit card bill. One late payment has a big impact on a mostly-empty credit report. Essentially, the less credit you have (and as a recent grad, odds are you don't have much), the more a bad blemish will hurt your score.
There's a lot to keep track of the weeks and months after college ends. Don't let your credit card bill slip between the cracks!
