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Posted Feb. 14, 2014

Credits Card and Keeping Your Student Debt Managable

Credit cards are definitely great cash-accessibility tools that allow you to access funds conveniently and also make payments. However, when used mindlessly and without a smart approach, one is likely to accumulate a lot of credit-card debt. In the case that you are a postgraduate student with a student-loan, you are likely to spend most of your future income paying off debts. This situation can only be salvaged if you learn how to use credit cards wisely and at the same time manage your finances well. There are numerous ways of avoiding getting into debt as a postgraduate student.

Here are a few useful insights on how to optimise credit card use while keeping your personal debt low. The main idea is to take advantage of the benefits that credit cards offer and avoid the pitfalls entirely:

Keep just the necessary credit cards Attaining financial independence during your postgrad studies might be challenging, but not impossible. To help achieve this, you can start by reducing the number of credit cards you own in case you have several and keep only one spare card that should be used as a last resort. You should also make a sound budget and monitor your expenditure closely so that it doesn’t get out of hand. Lastly, try and find income generating activities and ensure that you always have some savings in your account regardless of your debt.

Avoid making late card payments When you fail to make credit card payments or make late payments, the credit card company imposes penalties. Penalties and fees can at times exceed your credit card limit. Timely and full payments save you money and may make you eligible to receive rewards which vary depending on the issuing institution. Such rewards include extended warranties, purchase and theft protection for your credit card purchases.

Minimise the use of your credit card Ultimately, it would be best if you kept your credit-card use minimal. You are in control of your debt and the less you use credit cards the lower your debt is likely to be.

Repaying your student loan is inevitable and the last thing you need is the burden of credit card debt. Most postgraduate students live busy and sometimes thrifty lifestyles and often get into bad habits that could foster credit card debt. If you are a student, it is important to know that your credit card is not a substitute for cash and you cannot use it on a whim to buy food or clothes at cash-only stores. Develop the habit of using cash for your basic needs. In addition, do not make purchases that you cannot afford and it is never a good idea to use your credit cards to pay off debts. This is because such borrowing habits only lead to excessive debt, since it is unlikely that you will manage to pay off the credit card debt in the first place in case things go downhill.

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