For many young people, the temptation of their first credit card is too much to resist. That is why credit card companies will often set up booths on college and university campuses across Canada to tempt you with free gifts and low interest rates for signing up with them. While credit cards can be an excellent way to build your credit rating, the responsibility that comes with owning one cannot be overlooked.

When I first entered college, I saw a booth on campus advertising free NHL hockey blankets for signing up. Not only that, but acceptance was virtually guaranteed. For someone fresh out of high school, a credit card makes you feel important and like an adult. Being able to use it whenever you want to buy clothes, electronics, make-up and more is a thrill. The thrill will soon wear off when you realize that you have used up most of your credit limit in only a few months and have no way to pay it off.

Credit cards should not be taken lightly. While the company may advertise an interest rate of 1.99%, this is often only an introductory offer and the rate will skyrocket to 18% or higher after your first month. This means, on a $100 purchase, you will be paying $18 in interest directly to the credit card company. Over several months of not paying off your balance in full, this quickly adds up. Soon you will owe hundreds of dollars that you didn’t even spend!

If you do decide to sign up for a credit card, there are several things you can do to reduce the temptation of overspending. The first, and most important, is to make sure you have the funds needed to pay off your balance before you even use your credit card. Paying off your balance in full each month is an excellent way to build a credit rating, as you are showing the bank that you are responsible and have a steady income. The second is to leave your credit card at home and do not carry it with you in your wallet. This tactic helps to eliminate the temptation of overspending and using the card for purchases you do not need.

Of course, there is always online shopping. Online shopping should only be done when absolutely necessary (for Christmas gifts, for example). It is also advisable to get a credit card with a low credit limit – $1000 should be your absolute maximum. Anything higher and you run the risk of using it frivolously.

Credit cards can be an excellent tool for building your credit rating and establishing yourself, if used responsibly. If you decide to sign up for a credit card, ensure you take the steps outlined above to reduce overspending and, ultimately, reduce your stress level. After all, who needs extra stress during exams?