Be careful with your new credit card, government warns students

As if a student loan doesn't cause enough stress — many students will be heading into their first week of school with a new credit card too. 

The province wants to help by offering several tips to keep credit card debt manageable. 

"Credit cards can be powerful financial tools when used properly, but when used improperly they can tie people down with debt for years," FCAA Consumer Credit Division Director Cory Peters said in a release Tuesday.

Peters wants students to really understand the best way to use credit cards to avoid debt that could damage a student's credit rating for years. 

He also recommends researching and understanding the card you've signed up for. Sometimes paying an annual fee will give you better interest rates — which is great if plan to keep a balance — or rewards.

Peters also stressed the importance of paying at least the minimum balance due, no matter how small that amount may be.

"It's pretty easy to say that it's too small to matter, but it really does matter," Peters said. "It's more important to make at least the minimum payment every month by the due date then it is to skip a number of payments make make a large lump sum later."

Here are a few things other to keep in mind to keep your credit card debt under control:

• Pay your balance on time and in full and you can avoid interest payments.
• Make at least your minimum payment by the due date. Late payments will harm your credit rating.
• Avoid cash advances to avoid extra high interest rates. 
• Stay under your credit card limit. Going over can cost you a lot in extra interest and fees.
• Don't spend what you don't have. If you can't afford it without the credit card, you should pass on the item.

The information was timely for many university students, including Niki Chakma who just started her first year of studies at the University of Regina. Chakma said she is aware that using credit cards can be convenient.

"It's really easy to use," Chakma said. "And you know at the end of the month when you're going to see your statement, it's like, 'Ahhhh, I shouldn't just use that.'"

Saskatchewan's Financial and Consumer Affairs Authority noted that credit cards are not bad tools for students but advised students follow a budget and plan for the future.