Admission & Financial Aid

Understanding Credit and Debt

Credit and Debt: What You Don’t Know CAN Hurt You

Learning how to use credit wisely can lead you towards a positive financial future. Conversely, misusing credit cards or making late (or no!) payments can rapidly blossom into an overwhelming obstacle.

Give yourself the best chance for success by following these tips:

Make sure you can tell whether your purchase would be a NEED or a WANT. If you’re racking up credit card debt to meet your needs, there’s a problem with your budget.

When in doubt, wait it out.

  • Those impulse-buys of $20-$50 here or there add up quickly.

  • Is it *really* worth buying that eye-catching item right now? If you’re not sure, set it down.

  • Return to that store a day (or a week) later. Does that item have the same “pull” on your wallet?

Make a habit of paying your credit card balance in full each month.

  • If there’s a big purchase coming up, plan accordingly to allow enough time to save for it.

  • Carrying a balance month-to-month on your credit card(s) means you are incurring fees and interest that add to the total cost of your purchases.

  • If you do have an existing balance, try this calculator to estimate your repayment time frame.

Pay on time—EVERY time. Don’t pay more than you have to by adding on late fees. If your credit card’s due date falls at a bad date of the month, revisit your budget or contact the card issuer to see if you can change the due date.

Choose cards that work for YOU. Many cards offer cash-back or points options you can use for other purchases. If the card has an annual fee, make sure the benefits it offers will more than compensate for the fee amount.

Know the terminology, so you will understand how to manage your credit accounts. Click here for a very helpful glossary from the Federal Reserve.

Know what is on your credit history and check your credit report once a year. (It’s free!)

  • Information about where you have lived, how you pay your bills, and your amount and types of debt is gathered and reported by the three main credit bureaus: Equifax, Experian, and TransUnion.

  • Lenders, banks, insurance agencies, and credit card companies with whom you do business may review your credit history in order to evaluate your credit risk.

  • You can get a free credit report once a year. Review it to maintain accuracy of your information.

  • If you do find mistakes on your credit history, contact the agency or creditor immediately to resolve the issue. The longer an inaccurate entry sits on your history, the greater impact it can have on your financial standing.

  • The Federal Trade Commission has excellent tips on reviewing and building a better credit report.