Student Credit Cards - What to Watch Out For
One reason to own a student credit card is to begin the process of building your credit record.
Later in life your credit record will determine how much you pay in interest for your auto loan, for your home loan, and it will even affect how large of a monthly premium you pay for such things as life insurance.
Having a good credit score is important - and building that score can start with your first student credit card.
Credit is a part of the American way of life, whether you like it or not.
Renting a car or booking a hotel room or making an airline reservation or making purchases online require the use of a credit card in most cases.
Therefore it is important that everyone learn how to use credit wisely.
And what better time to begin your education than when you are a student? If Possible, Pay Off Your Card Every Month One of the first - and hardest! - lessons you need to learn is to not purchase depreciating assets with a credit card and pay them off over time.
In other words, buying consumer goods, such as CDs and the latest jeans using a credit card is generally an unwise choice unless you pay off your balance in full each month.
Otherwise the interest that you pay on the money you are borrowing to pay for these items adds tremendously to the cost of each item and can eventually cause you to go into deeper and deeper financial difficulties.
So what should you look for in a student credit card and what should you look out for?For most students one thing you should look for in a credit card is a low interest rate.
If you carry a credit balance from month to month the lower your interest rate the lower your payments and the easier and faster it is to pay off your debt.
If you obsessively pay off your debt each and every month and you don't carry a credit balance from one month to the next, then the interest rate on your card becomes less important and the card's grace period becomes more important.
The grace period is the number of days between the time you make a purchase and the time that interest begins to accrue on the item you purchased.
If you have a balance due on your card from month to month then there is no grace period at all - you start paying interest from the moment you purchase an item - but if you do not carry a balance each month then you may have as long as 25 days before you begin paying interest.
Beware of High Fees - Especially a Monthly Maintenance Fee Fees are another huge concern for students as well as any other card holder.
ATM fees can be a big concern for high school and college students.
Many students use ATMs on an almost daily basis and many banks take advantage of that fact by charging totally outrageous fees for the use of ATMs.
Search for cards with the lowest ATM fees possible.
Yearly fees are not charged by very many cards anymore, so take your time and make certain that your card does not charge a yearly fee.
However, what can be much more insidious is a monthly "maintenance fee.
"This is a bogus fee created by banks so they can charge each and every customer a fee every month, regardless of how they use their card.
When you are looking for a student card the most important thing - by far - is to have the widest possible choice of cards.
You need to find a site that allows you to compare the features of each card you are considering head-to-head so that you can make the wisest choice possible.
Later in life your credit record will determine how much you pay in interest for your auto loan, for your home loan, and it will even affect how large of a monthly premium you pay for such things as life insurance.
Having a good credit score is important - and building that score can start with your first student credit card.
Credit is a part of the American way of life, whether you like it or not.
Renting a car or booking a hotel room or making an airline reservation or making purchases online require the use of a credit card in most cases.
Therefore it is important that everyone learn how to use credit wisely.
And what better time to begin your education than when you are a student? If Possible, Pay Off Your Card Every Month One of the first - and hardest! - lessons you need to learn is to not purchase depreciating assets with a credit card and pay them off over time.
In other words, buying consumer goods, such as CDs and the latest jeans using a credit card is generally an unwise choice unless you pay off your balance in full each month.
Otherwise the interest that you pay on the money you are borrowing to pay for these items adds tremendously to the cost of each item and can eventually cause you to go into deeper and deeper financial difficulties.
So what should you look for in a student credit card and what should you look out for?For most students one thing you should look for in a credit card is a low interest rate.
If you carry a credit balance from month to month the lower your interest rate the lower your payments and the easier and faster it is to pay off your debt.
If you obsessively pay off your debt each and every month and you don't carry a credit balance from one month to the next, then the interest rate on your card becomes less important and the card's grace period becomes more important.
The grace period is the number of days between the time you make a purchase and the time that interest begins to accrue on the item you purchased.
If you have a balance due on your card from month to month then there is no grace period at all - you start paying interest from the moment you purchase an item - but if you do not carry a balance each month then you may have as long as 25 days before you begin paying interest.
Beware of High Fees - Especially a Monthly Maintenance Fee Fees are another huge concern for students as well as any other card holder.
ATM fees can be a big concern for high school and college students.
Many students use ATMs on an almost daily basis and many banks take advantage of that fact by charging totally outrageous fees for the use of ATMs.
Search for cards with the lowest ATM fees possible.
Yearly fees are not charged by very many cards anymore, so take your time and make certain that your card does not charge a yearly fee.
However, what can be much more insidious is a monthly "maintenance fee.
"This is a bogus fee created by banks so they can charge each and every customer a fee every month, regardless of how they use their card.
When you are looking for a student card the most important thing - by far - is to have the widest possible choice of cards.
You need to find a site that allows you to compare the features of each card you are considering head-to-head so that you can make the wisest choice possible.
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