In 1951, Diner’s Club issued the very first credit card to 200 customers who could use it at 27 restaurants in New York.  Today we can buy a car off the Internet and pay for it with a credit card!  The magnetic stripe (mag-stripe) on the back of the card made all of this possible.  It contains all of the relevant information and allows computer systems to track a cardholder’s use. With the advent of the mag-stripe, the credit card industry entered the age of information and never looked back.  Therefore, in this age of information, it is essential to understand why establishing credit and learning how to use it is vitally important in today’s world.

If you are a college student, having a credit card and making payments on time will make a difference in your life “after-college”.  Translation?  Everything from the current balances on your credit cards to the number of times you were late in making a payment is tracked and reported to a credit bureau.  Each time you apply for credit, the credit bureau reports your payment history.  Depending on your profession of choice, your credit history may be considered by your potential employer.  It could also be a factor in obtaining approval to rent an apartment and it will be critical in buying your first car and your first house! 

To maintain a good credit score: 

• Look for the credit card that offers the lowest interest rate, and incentives, like points, miles or cash-back incentives.
• Don’t apply for every offer you receive in the mail and at every store in the mall.  Each time you do, an inquiry is made on your credit history.  These inquiries are reported along with your payment history.  If you have too many inquiries, this is potentially harmful to your credit score as it appears that you ARE applying for credit everywhere and soon you will be going on a huge spending spree…
• Don’t go wild and immediately charge up to your limit.  Simply put, don’t buy more than you can pay for by the following month or so.
• Make your payment on time, every time.