How to Handle Your First Credit Card
by Prin Dumas

The first thing I did when I went away to college and turned 18 was apply for a credit card.  I "needed" to do so.  My parents were not in a financial situation to help me and I only had so many hours to work while adapting to being a full time student at Fordham Universty.  Books, bills, and let's be honest, a few beers on the weekend, needed to be paid somehow.  I didn't want to waste all of my hard-earned money.  I wanted to "save" and be able to "do things."  I felt I deserved a little flexibility, and credit cards offered me that opportunity.

There was nothing wrong with any of my intentions, except for one thing:  I didn't make enough money to get more than one credit card.  I also didn't earn the same amount of money every month, because I worked a combination of retail and freelancing.  The more I used a card, the more I owed monthly.  What was the big deal if I paid late?  Didn't they know I had midterms?  No.  They didn't, and even if they did, Citibank, MBNA, and any other major creditor really gave a hoot about whether or not I had a "good excuse" (in my world) for not paying a bill on time.

No one ever taught me the meticulous requirements of earning and maintaining good credit.  I figured that a little debt was normal, and although it was, it was more normal to only get yourself in debt if you had the means to pay it back.  By the time I was a senior in college, I had encountered a few unexpected illnesses.  I ended up needing to put any money to getting better, and it made "sense" to fall behind on a few hundred dollars in credit card debt.

It wasn't.  Years later, despite the great efforts to pay off all mishaps, my credit history still shows a time when I did not priortize paying bills.  Call it being young or being ignorant of the system, but a credit card and your credit are serious business.

Here are a few simple hints:
Start with one credit card and limit the use on it to:  food on Fridays and prescription or medical co-payments.  "This card cannot be used for event tickets, vacations, or gift-buying."  See how well you do with this boundary.  The odds are that your first credit card will have a limit of less than $1000.  If you are just starting out in college, be logical.  Working retail only gives you a few hundred dollars a month.  One card will suck up a couple of months of work in the snap of a finger.  Be wise with your credit limits for the first year.

Paying on time may seem logical, but what happens when you honestly forget a due date?  Professors give extentions, why can't the cards?  It doesn't work that way.  It is rare that a creditor will take sympathy to any reason you have for missing or delaying on a payment.  You should mark a due date for any bill on the planner you use.  This way, you can remind yourself to send a payment as a "to do" at say 10 p.m. 5 nights before the due date. 

Do not charge "fantasies" on your new credit.  If you want to go on vacation, save money instead.  If you need to make a reservation for a trip, use the card and pay it off as soon as possible.  Don't live beyond your realistic means.

Avoid credit offers.  As soon as you have one, everyone wants to extend their generous credit to you.  Beware!  The more cards you have with small credit limits, the easier it will be to max out the amount you can use on each card.  You are better off waiting until you qualify for a greater credit limit on one card than taking out 5 small $500 credit limit cards.

Do not automatically enroll your credit card to anything!  Everyone requires a credit card of some sort to shop online and do certain types of shopping.  This is convenient, but it also means you are likely to say "yes" to offers, which may bill your card after a "trial offer" or "30 day" risk-free period.  It's easy to forget while in school that you agreed to cancel an account before being charged.

Forget that your parents exist.  If you use your cards with the expectation that your parents will help pay for them, you are being inconsiderate and immature.  It would be nice if parents paid debts, but that's not their job.  You got yourself into the mess, you get yourself out.  Live accordingly.  Assume they will not come to the rescue, even if you know that they probably will.

Above all, keep your accounts open to maintain the good credit you will begin by paying everything on time.  If you close an account, it's as if it never existed sometimes.  All the bad still stays and all the good vanishes.  Credit reports are not always favorable. 

Why do you need good credit?
Student loans to cover balances
Car (new or used)
Private loans to help you while you adjust to a new job and life after college
A new home
Getting married (what, did you expect daddy to pay for all of it?)

Good credit is essential in the first few years after college.  For four years, while in college, you have the chance to build a great reputation with credit cards.  It is okay to have debt, as long as you intend to pay it back.