College Connect: Managing credit for the first time

By Troy D’Souza

In high school I was super into business. I took a lot of business classes, was in DECA, a competitive business club and I even almost ended up majoring in business in college. That said, I felt like I always had a pretty good grasp on things. One thing I always wanted was a credit card to start building good credit but my parents were not having it.

Finally towards the start of my junior year of college, I finally got a credit card!

I took the time to search message boards, review sites, ask friends and my older brother about which cards were the best, what to look for when comparing and more. I thought about getting a miles card because I want to travel, but my brother recommended against it to start out.

I settled on the Discover IT card for students and applied. I got a good line of credit, it was 2% cash back on certain purchases which was a good place to start and I was excited to start building credit slowly as a college student. As far as I had gathered, as long as I was paying the bill on time, I was good to go.

I’d say I’m fairly responsible and pretty frugal so I was cautious when using my credit card for the most part.I did make the mistake of making a massive (about $300) purchase on my card, not realizing that the percentage utilization was even a consideration in the FICO score. I found that out after the credit cycle ended and my score dropped.

Overall, I pretty much used the credit card for gas and groceries, occasionally when eating out, but I tried to use my debit card a lot too.

I get text messages every day from Bank of America with my checking account that shows my balance which was more of a security measure for me initially. It became pretty easy for me to think I had more money than I actually did because the text message would read, say, $500 but I would still owe maybe $65  on the credit card.

Sometimes that lead to me spending more than I would have liked to on things. I started to use my debit card a lot more just so I was more conscious of how much money I actually had at a time.

It also took me a long time to understand how the credit cycle worked because there was the statement closing day, days when payments were due. I confused some of the dates and had to call both Discover and then my dad to make sure I understood what the cycle was like so I knew when payments were due. Finally, it made sense and that payments were due on the 5th of every month for the month before and statements for the current month ran through the 10th of the month.

All this said, I think I still feel pretty secure and responsible about where my money goes and how I spend it. My advice to anyone looking to get a credit card for the first time would be to definitely do research and compare cards both through your bank and outside of it to make sure you get the best card for you. Also, having a job of some capacity is pretty much a necessity to help budget and make sure you never have to worry about paying a late fee. Lastly, from what I know, have read and have heard, arguably the most important thing is paying the bill on time, because not only will that be what builds credit but also saves you time and money from dealing with late fees!

Troy D’Souza is a journalism major at the University of Missouri.

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