Credit Cards are like student loans in a way. They allow you to pay (borrow money) for your college expenses. They are very flexible as you can pay for all types of expenses that come up.
That is their biggest advantage. You pay for this flexibility advantage with higher interest rates.
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Credit card companies look for students and students look for money. A perfect match if you use them wisely. College expenses are much more than tuition
and textbooks. They can come in handy while in college. There is no magic number for how many you should have, but a good number seems about 4. Credit cards will build your
credit history and your borrowing possibilities will grow.
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Credit History could be important if you try to apply for
Student Loans later. Remember for
Private Student Loans and Peer to Peer Student Loans
credit history will be required. Credit cards help you Build Perfect Credit History. Apply for them and
try not to use them unless you have to. A very responsible person can grow his borrowing limits very fast.
Your first credit card will carry higher interest rate. Do not worry. You can not use it, or you can simple pay off right away. Later on you'll be able to transfer your credit card
into another one with better terms. Shop around and compare. Read all terms and agreements. If you can not receive a credit card, try few of those prepaid once and start from there.
One of the sources for your credit cards is the college you go to. Many times credit companies advertise there. It's much easier to get approved at your own college, but it does not cost
anything to look everywhere including this site.
There are many types of cards. Some of them include:
Student Credit Cards are not much different from regular credit cards, but they may include specific features. For example, some credit cards designed for students offer parental
control. Parents can manager and set limits on those cards. This way parents have the ability to set allowances and monitor spending online.
Cards designed for students offer bonus cash back in categories related to education. Students buying at bookstores, record stores, movie theaters, or movie rentals will get earn points or
get some money back from those purchases.
Some cards (mostly student debit cards) allow parents to loan money into the them online. This feature is great for emergencies when the child is away from home.
It's very hard to define what a good credit card is. Good is a relative term and there is no credit card which is equally good for all. Everyone is different and their borrowing and spending
style differs as well.
Good credit card should have no annual fees is possible. They should offer points and rewards for purchases. It is nice to have cash back bonus on every purchase. APR should be low.
There should be no spending tiers or caps on how much you can earn.
Things to think about are the interest rate, annual fees, features the credit card may offer, and fine print. Make sure to shop around as almost every bank offer a card.
Rates and features vary depending on the provider.
Credit Limit - Credit limit is the maximum amount you can charge on the card.
Balance - It is the total of your purchases, finance charges, and credit card fees.
APR - Annual Percentage Rate is the interest rate applied a balance carried beyond the grace period.
Grace Period - The amount of time you have to pay your balance before a finance charge is applied to your purchase.
Finance Charge - Cost of carrying a balance.
Incentives and Rewards - Many credit cards offer rewards and incentives for using their credit card.
Credit Card Fees - Annual fee, finance charge, late fee, and over-the-limit fee are some of the most common fees.
With a prepaid credit card, you deposit money onto the card. It is like a gift card. When you purchase goods money is taken away from the card.
A prepaid debit card or a simple debit card can help you control your spending because you can only spend up to the amount you have deposited into the account.
New federal laws impose restrictions on issuing credit cards to individuals under 21. This rule can be ignored if the applicant has the independent ability to repay debt, or has an adult co-signer who agrees to accept joint liability for the account.
The rule is you have to be 21, but you can still try to apply if you're not 21. Try find a co-signer for your card if you really need it. It's much easier to apply for a debit or a prepaid card.
They can be obtained at your local grocery store.
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Important Questions |
Q: I'm offered a credit card, but there is a fee for it?
If this is your first application and you are offered a credit card that you have to pay for in order to have it, do not take it. Look around, maybe there is someone better with a better deal.
Remember credit cards are provided by private companies fighting for people like you. Terms are different from across credit card companies.
Q: Should you close credit card accounts that you are not using?
No, every time you close an account you are lowering your FICO SCORE by raising a flag that shows the percentage of credit debt you have seems to have increased. You should keep all lines open and
not have more than seven of them.
Q: How do you dispute a credit card charge?
Issuers must follow rules for promptly addressing a credit card dispute. You'll get a statement outlining their rules for correcting billing errors when you open an account and at least once a year.
In fact, many issuers include a summary of these rights on your bills. If you find a mistake on your bill, you can dispute the charge and withhold payment on that amount while the charge is being
investigated. Write to the creditor at the address indicated on your statement for "billing inquiries." Include your name, address, account number, and a description of the error. Send your letter
soon. It must reach the creditor within 60 days after the first bill containing the error was mailed to you.
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