Malaysian public universities are going to start a new semester soon, so to all returning students, welcome back, and to new students, congratulations on your enrolment! For many of you, college or university life is the first time you’ll be stepping out of your nest for an extended period of time, and this might feel scary. For one, getting money from your parents is no longer as simple as knocking on their door! You could always withdraw using a debit or ATM card, but if you’re trying to be more independent, you can try to get that elusive, carefully-guarded piece of plastic that made bigger-than-wallet-capacity transactions possible…a credit card! Of course, you’ve got to be careful too, so here are some tips to stay safe with a credit card in college.
There are many credit cards around with different features and perks, but as a fresh student with typically little to no income, your choices are rather limited to a few beginner cards. Also, anyone earning less than RM3,000 a month in Malaysia is only eligible for two credit cards at one time. Make a smart choice and stick with it, because constantly cancelling cards will negatively affect your credit report! It’s best if you start small and go with just one credit card, just for starters.
Stay Within Your Credit Limit
Despite credit cards allowing you to spend more money than you have, you should always try to stay within your allocated credit limit. Spend only what you can repay at the end of the billing cycle, and remember to pay! Otherwise, the penalties and high interest charged on your remaining balance can really snowball into a large debt before you even graduate.
You might think you’re being kind-hearted and trusting by letting your friend use your credit card, but you’re actually putting yourself at risk. Friendships can fail in the blink of an eye, but credit card repayments remain your responsibility as long as your credit card was used with your PIN number and/or signature on it! To avoid this risk, do not let your friends borrow your credit card.
You’re on Your Own
For most of you, college or university life will be the first prolonged taste of freedom and semi-adult life you will experience. It can be an exhilarating time and of course your parents try to be there if you slip and fall financially, but you should try to mentally prepare yourself to take control of your own credit card habits. Pretend that you can’t rely on anyone to bail you out if you overspend or fall victim to a credit card fraud. It’ll be good training for your adult life!
Be Careful with Your Spending
Even if you work part-time while studying, let’s face it, most beginner and part-time jobs don’t tend to pay very well. Keep in mind that you’ll have to pay off your credit card debt every month, and try to limit the usage of your card if you find it difficult to consider it as a type of money. Over time, with better pay and better understanding of how credit works, you can allow yourself much freedom.
College and university life is a fun time to live, but it isn’t a free pass to do and spend recklessly as you like! It’s also a time to learn about restraint and responsibilities, so owning a credit card is actually a good place to start. Above all, have fun studying!