July 28, 2020

Group of students laughing

When it comes to using a credit card, it’s important for students to know how to manage them properly so as not to end up with a bad credit score or—worse—debt. For students who are returning to school this fall, here are a few tips you should know to about building (and managing!) credit.

Credit is good – when managed properly

If you’re looking for a job, are in the market for a new car, or want to rent or purchase a home after you graduate from college, you’re going to need credit. Employers, lenders and even landlords all use credit as a way to gauge your ability to manage your finances responsibly. Building credit – by properly managing a credit card while you’re a student – means you’re building a strong foundation for your financial future.

Start small

When you’re shopping for your first credit card, make sure you read the fine print! You don’t need a big credit limit to start building credit. For college students, it’s a good idea to start with a small line of credit at a lower rate than a bigger line of credit with a high rate. LUSO Federal Credit Union offers the Smart Start VISA Credit Card for college students ages 18-24 with a minimum credit line of $200.

Control your spending

When you’re a student, you’re busy managing your course load and participating in extracurricular activities, but make sure you’re not too busy to pay attention to your monthly spending. If you’re close to maxing out your available credit limit, you’re spending too much, which will make paying your balance off (in full)  difficult. Credit Bureaus, which collect and research individual credit information, prefer consumers to use no more than 30% of their available credit. For example, on a credit card with a $1,000 limit, you should keep your balance below $300. If your balance rises above that 30% threshold, it could negatively affect your credit score. Another important thing to remember in managing your credit? Pay your monthly payments on time, every time.

Get a ‘Smart Start’ on your future

If you’re a student, LUSO offers a variety of products to help you plan for your future, from checking accounts to auto loans and credit cards. Contact us using the LIVE CHAT feature of our website, or call (844) LUSO-FCU to learn more.

LUSO Federal Credit Union is a not-for-profit, member-owned financial cooperative dedicated to providing members with quality financial services and products. We at LUSO pride ourselves on serving the financial needs of our members and helping them save for the special occasions in life.   

Feel free to contact our Ludlow or Wilbraham branch toll free at 1-844-LUSO-FCU.

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