Credit Card How To For College Students

Introduction

For many college students, the use of credit cards is a much needed convenience. They can use them to pay for car repairs, books, clothes and flights back home. However, considering the huge plethora of credit cards and the financial implications of owning one, it is vital to select the right one for your needs. In this credit card how to guide, we shall explore the major factors each student should consider before applying for a credit card.

Step 1

Credit Card how to Guide Step 1: Consider the Interest Rate
The interest pegged on a credit card is probably the biggest factor you will have to consider, while selecting a credit card. Some cards may have low interest rates which may skyrocket if you miss a payment. Others may have low introductory rates, which may rise after a set duration, while others may have a fixed rate of interest. Whichever card you choose, make sure you know the rate charged on your card, and how it compares to other cards.

Step 2

Credit Card how to Guide Step 2: Find Out the Credit Limit
Student credit cards will have in place a limit on how much money you can spend on it, which is also known as a credit limit. It is often advisable for students to start with a low limit, because it is quite easy to rack up a huge credit card bill without even realizing it. Starting with a low credit limit will enable you to keep track off your payments, without having to worry about excessively high credit card bills.

Step 3

Credit Card how to Guide Step 3: Find Out What Happens When You Miss a Payment
It is very easy to confuse credit money with real money. You should always remind yourself that it is just a loan, and so you will be expected to pay it back. Typically there are number of recourse actions a card issuer will take in the event you are late or defaulted on your payments. These include a higher interest rate, late fees and other penalties.

Step 4

Credit Card how to Guide Step 4: Consider Your Payment Options
Most college students spend much of their time in class. Therefore, it would make sense for your card issuer to have in place payment options that suit your accessibility needs. Most card companies will allow you to make your payments online, but you should consider whether there are any additional fees for using such methods and the time duration it takes to process such transactions.

Step 5

Credit Card how to Guide Step 5: Consider Your Credit History
Students applying for a credit card will find it hard to gain approval if they do not have a credit history. You may therefore require a cosigner, who may be obligated to cover your financial obligations if you miss or default on a payment.

Tips

Credit Card how to Guide Step 6: Check For Annual Fees
Some credit card programs may offer very attractive promos and fun packages, but charge very high annual fees. Before signing up, check for any annual fees and their charges.

Comments