How Should You Choose a Student Credit Card?

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There are specific details that you should pay attention to when it comes to credit cards. They can either help or hurt your financial situation, and being broke AND deep in debt during college is the worst tight spot you could ever be in when it comes to money.

It is important, when you are looking for a credit card to use while you are in school, to find one that will be beneficial to you. You need one that will not allow you to spend so much that you get far beyond your ability to repay in debt, but one that will let you get the things that you need to that you cannot instantly pay for in this scraping-the-bottom-of-the-barrel time in your life. Here are a few things you should pay attention to when shopping for the credit card that is right for you.

APR

Knowing what and how the APR works is important. The best kind of interest rate you would be looking for is a fixed rate, but those are harder to find than a variable rate, and may not be a very low fixed rate. Sometimes you will benefit just as much with a variable interest rate. Make sure you know which you will be getting with the credit card you go with.

If you are on a variable interest rate, it is important to know by what system your interest rate will go up. Of course, this information is more important only if you will be carrying a balance from month to month on your credit card. If not, or in other words, if you plan on paying your credit card off as you go each month, the interest rate will not be such a big deal for you.

Do not confuse the APR with the introductory rate. Some credit cards will offer you a great intro rate, but will end up charging you a much larger APR after the time given with the introductory rate expires. Make sure that you go for the lowest rate possible that will last you longer than six months.

Rewards Cards

The credit cards that give you rewards for the purchases you make are the best kind. These kind of cards allow you, in a way, to get a discount on the things you purchase on credit. Try to go for a credit card that will give you the kind of rewards that you will use, like ones with points that you can cash in for a numerous amount of items rather than just something like sky-miles that you may not use.

Penalties

Read the fine print carefully. You need to know how much your interest rate will go up, and what other kinds of charges they will be pouring onto you if you make a late payment or two. You may not plan on making late payments, but it is important, when you are shopping for a credit card, to know how much you will be charged IF you fail to make a payment on time, and what other credit card companies would charge you that might be easier on you.

Why Are People So Afraid Of Credit Cards?

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Many people believe that having a credit card is too big of a risk to take. They fear several aspects of the credit card that can cause huge debt problems. What many people do not realize is that they control how much debt they take upon themselves, and they control how well they can manage a credit card. Some may fear things that they cannot control though, like theft, how high the interest rates can climb, and other penalties for late payments. Well, there are a few pieces of advice that can be offered for these kind of fears.

Fear: My Credit card may be stolen

It is out of your control when someone steals and misuses your credit card. Still there is comfort in knowing you can cancel your credit card immediately after you realize it has been stolen. This way you can advise the credit card companies not to make any kind of transactions with that particular credit card.

Fear: I will spend too much on credit cards

This risk applies to everyone. No matter how rich you are, you can still spend beyond your means using credit cards. The best solution to this is completely dependant upon the card holder. It is totally up to you to determine and control your spending habits so that you do not get into debt that you cannot escape. This is where many people fall short. The key is to be well disciplined. You will be rewarded for it if you keep your spending consistent enough with your payment abilities so that you can pay your bills on time. The best way to stay out of debt is to keep the amount of money that you spend low enough that you can pay it off frequently, like at the end of the month. If you only pay the minimum amount each month and spend more than you pay, this will rack up your debt to the point where it can be unbearable, consequently leaving you paying bills for several years to come.

Fear: People I know have credit cards with way high interest rates

Sometimes the interest rates on your credit cards can increase due to contract agreement, or as a penalty. It is important to know everything about your credit card agreement when you sign for one. You need to know how much the interest is, if and when it expires, how much the rate will increase after the expiration date, and how high it will be if you pay late on your bills or if you do not pay in full. The best way to prevent a shock when and if your interest rate goes up is to know ahead of time exactly how it’s going to change and whether or not you can afford a possible increase. Knowing the terms on your credit cards will also help you as you shop for the one that is right for you.

Fear: Not all credit cards are accepted at stores anyway

You should get a credit card that will be accpeted in most places, like Visa or Mastercard. These kinds of credit cards are seldom turned down, and it gives you easier access to buying on credit.