Credit cards don’t always have to mean a crazy downward spiral of doom and debt. In fact, contrary to popular credit card conspiracies, under the right circumstances, they can actually be quite helpful.
The key to cracking credit cards is all in money management. Once you find what works for you, bills won’t have to mean beans.
What does it all really mean?
A credit card is usually a plastic card (although there are some gorgeous Metal cards out there 😉) which comes with a preloaded sum of money. It’s essentially a loan from the bank which allows you to make purchases. It’s all fine and dandy as long as you pay the borrowed money back at some point. There are a variety of credit cards available, so do a thorough search to find the right one for you.
3 Reasons why a credit card could be a good next step
- Build Your Credit – Credit cards can be a great way to build a credit score. It may not seem important now, but in the future, you’ll need a good credit score to take out loans, get a mortgage, rent houses or apartments, to get a better car insurance rate, all that adulting stuff.
- Gain Vital Money Management Skills – Taking out a credit card and learning how to use and manage it properly shapes your money management skills. Instead of splashing the cash, start investing in your future.
- Earn rewards and cashback – Some credit cards also come loaded with reward points and cashback. These added perks will help your money stretch a little longer as you’ll get a little back when you spend your cash.
7 ways to manage a credit card successfully
Credit cards can get the best of us. Whether it’s the weight of added interest hidden in small print, or the bad habit of forgetting to pay back your credit card on time, and then consequently drowning in late payment fees that you can’t seem to get on top of.
Absolute nightmare. Get clued up about credit cards so you can cut out the added hassle.
Take a look at our top tips on how to manage your credit card.
- Never, ever, ever miss a payment deadline.
It might seem like a quite obvious rule, but it’s an important one. Forgetting to pay your credit card bill will most likely result in additional late payment fees and sometimes even increased APR rates.
- Read, and then re-read the terms and conditions
Make sure you understand the terms and conditions of your card. It’s easy to accumulate charges on things which may seem normal to you, like withdrawing cash from an ATM or carrying out a balance transfer. Make sure you know the ins and out of your agreement to avoid accruing unnecessary costs.
- Avoid falling down the rabbit hole of minimum payments
You’ll want to make sure you’re paying more than the minimum payments, otherwise, you could end up paying back way more than what you borrowed. This will affect your credit utilisation. The more you’re using your credit, the worse it is for your credit score.
- Never spend more money than you can repay
Student income can be very limiting, so it is essential that when taking out a credit card, you borrow within the means of what you can afford.
- Check the APR rate
The APR rate is the annual percentage rate. This is the yearly cost of borrowing money using credit cards or loans. This will be paid on top of monthly payments, so take this into consideration while searching for the perfect credit card for you. The lower, the better.
- Check and read through your statement
It might be boring or even nerve wracking to see where all your money’s gone at the end of the month, but it sure is important. Sometimes a purchase can be billed twice in error, or there could be fraudulent activity occurring on your account. All in all, it’s in your best interest to keep an eye on your account.
- Don’t sign up for too many credit cards
At first glance, signing up for loads of credit cards might seem like a good idea – more credit cards means more money. But that’s not always the case. Remember, a credit card is borrowed money – you’ll have to pay it back. By opening lots of credit card accounts, you’ll have more payments to make each month, and as a student with limited income, it isn’t the wisest choice to make.
- Interest – Interest is the fee charged for borrowing money by use of the credit card.
- Credit – Credit refers to the customer’s ability to receive goods or purchases without making a payment first, based on the agreement that the payments will be made in the future.
- APR – APR stands for annual percentage rate. It is the yearly cost of borrowing money using credit cards or loans. It’s calculated by taking into account interest and other charges which accrued over the year, including the annual fee if applicable.
- Credit Limit – A credit limit is the maximum amount of credit that a financial institution or lender is providing to a debtor. (The individual borrowing the money.)
- Balance Transfer – A balance transfer means moving an existing debt from one credit card provider to another.
When you’re all clued up, once you receive your credit card, you can add it and the rest of your bank cards to our Curve app. You’ll then receive a sleek Curve card in the post and unlock the, ‘All your cards in one’ experience. The excitement doesn’t end there, you can continue to reap the benefits of your existing cards whilst, courtesy of Curve, you’ll receive additional perks on top.