Candice So attended Carleton University from 2008 to 2012. She works as the Senior Communications Manager at Ratehub.ca, Canada’s leading financial comparison website.

Spring is here, and with it often comes booths on campus filled with salespeople who want you to sign up for a credit card.

Credit cards can be incredibly useful tools for managing your finances. They can help you build your credit rating for the future, track your spending, and earn rewards. However, they can also do a lot of damage if you fail to use them wisely. Here are some steps you can take to ensure you’re using your credit cards to help build your financial future.

1. Research and pick the right credit card for you

There are dozens of different credit cards in Canada. Just because someone offers you a credit card doesn’t mean that it’s the right credit card for you – it just means that they want to get more people signed up for that specific card. You’re responsible for finding which card is the right fit for you.

There are credit cards for all sorts of different wants and needs: cards for people who travel, people who dine out a lot, people who carry a balance on their card, etc. These cards all have different features. If you pick one of the travel credit cards, you might get free airport lounges, flight discounts, free baggage, or other valuable benefits. Picking the right card for you is like picking the right tool for a job – you get better results.

Research isn’t always exciting but putting in the work in advance can pay huge dividends for you in the future. We’ve worked to make it as easy as possible with 5 simple steps to choosing a credit card.

2. Understand the fees and interest charges

All too often, people only learn about credit card fees when they receive their statement at the end of each month. Learning about these fees in advance helps you eliminate unpleasant surprises.

Some credit cards charge annual fees, and others don’t. Typically, that’s the only fee most people look at, but there are other important fees to consider. What interest rate does your credit card charge? Do you pay extra fees when you buy things online or in a foreign currency?

These fees and interest charges can cost you thousands of dollars if not managed properly, especially if you run up unpaid balances.

3. Learn about the bonuses

You are worth more than a frisbee, t-shirt, or water bottle! All too often, campus credit card sign ups are promoted alongside small trinkets that get attention in the moment but have no value in the long-term.

The best credit cards in Canada can offer hundreds or thousands of dollars in reward benefits each year, but you only maximize those benefits if you use the cards properly. By learning how bonuses on your credit card work, you keep yourself from leaving money on the table, and from signing up for cards you don’t need.

4. Set a budget

Now that you understand your credit card, you’re almost ready to use it. You have just one more step – making a budget.

Your credit card isn’t free money. Spending money on your credit card without a plan to pay it off is an invitation to long-term financial trouble. Unpaid balances quickly grow due to the high interest rates credit cards charge, and if you miss paying a bill on time, it can harm your credit rating.

You need to make a budget. As part of the budget process, you decide when you’ll use your credit card and how you plan to pay off your credit card bill.

When you establish a plan for how you’ll spend your money and stick to it, you are building yourself a strong financial foundation for your life after graduation.

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