Beware the Credit Bender

Awesome! Wicked! You just got your first credit card! You can finally order concert tickets without having to bug your mom! You can treat yourself to that new outfit you’ve been eying! YOU CAN RENT A HOTEL ROOM!!!

But, before you get too much more excited, you may want to hold your horses. Like Uncle Ben told Peter Parker, with great power comes great responsibility.

Most students don’t stop to consider the importance of maintaining their credit, and many more are unaware of the lasting effects that a bad credit rating can have on their adult lives. Far after that outfit is out of style and the memories of that concert have faded, you just may be in for some serious problems.

Think of your finances as a really good night out on the town. Your credit Is alcohol. Your poor credit rating is that hang over that makes you hate everything about your life the next morning. And sadly, unlike a hangover, orange juice and a nap will only soothe you so much, that credit rating isn’t going away.

Your credit rating will help the bank determine if you are a safe bet for loans. If your credit was bad in university or college you are going to have a lot of difficulty getting a car loan or a mortgage. Because information about your credit tends to hang on for about 7 years, your financial missteps now could very well spell disaster later when you are making important life steps.

So, how do you avoid the bad credit hangover? To begin with, don’t spend beyond your means. Just because you have been given a credit card with a $1000 limit does not mean that you are going to be able to pay it all back. Spend only what you can afford and make payments on time. You won’t just avoid the morning after regret; you will be able to establish yourself as a responsible borrower.

It is also a pretty good idea to pay back more then just the minimum payment whenever possible. Not only will you pay down the amount faster (banks love a solid brownnoser) but you will also save yourself some serious interest.

Don’t be afraid to treat yourself when you get that first taste of credit, but make sure you are shopping with restraint. A credit card is a tool in establishing yourself as a financially independent adult, try to save the shopping sprees for those special occasions.