Credit Cards

A Word About Credit Cards

When you use credit cards successfully, you build a positive credit history. Unfortunately, credit card debt can also ruin your credit history if you are not careful. As a medical student, you will be inundated with offers of credit cards and unsecured lines of credit.

Following are a few tips on how to handle credit cards successfully, especially when on a tight budget:

Sign up only for those cards you really need.

Sign off on purchases where a credit card is useful or needed (e.g., an emergency car repair, an airline ticket, or a business expense for which you will be reimbursed).

Keep your receipts from every purchase and keep a running total, at least in your head, so you will not be surprised by a big balance when your statement arrives, or manually keep track of your debt. Establish a limit of what you can charge monthly on your credit cards. Use a Post-it note to mark down each charge as you make it. As the month progresses, keep an eye on the running total to make sure you are staying within the limit you have set.

Pay off your credit card in full every month, or at least by every third month. Do not use your credit card for major purchases you cannot pay for in 90 days. Do not use it as a credit line for money to make payments on loans (even your student loans), except in the most dire emergency.

Pay attention to special offers. Read the fine print, and be sure a great-sounding deal really benefits you.

Credit Card ABCs

A credit card is helpful for emergencies, but emergencies rarely happen at the mall.

Buying something on SALE is still SPENDING, not SAVING!

Credit card debt is not an investment, but it does reduce your ability to invest!

Debt from credit cards can make it more difficult to achieve your financial goals.