complete
I suggest that you find a credit card interest calculator to be able to find out how your credit is and how it can be affected based on how you spend using that card. This tool is going to help a lot of you to figure out how important it is to pay off your bills. One of the best ones that I had found was at webwinder.com. It is pretty staggering to think about it when you see what would happen with minimum payments only being paid on these balances.
To give you an example of what could happen I threw in some numbers into the calculator. I simply charged $2,000 on this calculator for the balance. Then I did an annual interest rate of 14%. After that I put in a minimum payment of 2% or $10 depending on which one is higher. So I calculated it and it came out kind of mind boggling. The interest would be $2,354 dollars and it would take 242 payments to pay it off. That would be over 20 years before that charge of $2,000 was paid off. That is absolutely nuts. You will have lived a quarter of your life before you are able to pay it off. That isn’t a pleasant thought.
I think this shows why it is so important to calculate your debt and find safe and faster ways to pay off interest and get to the principal. These calculators give you a good understanding and at the same time it is probably important to get a financial adviser to help you pay off your debt quicker. It is hard being in college with a lot of student loans because of ridiculous tuition fees.
You have to worry about a lot of debt already so the last thing you want to do is worry about paying off credit card debt. You have a lot more control over this issue because you can budget safely within your lifestyle. This is a hard habit to make for a lot of college students that are trying hard to impress the opposite sex, but it will be even more impressive if you can avoid a lot of needless debt going into a relationship. If you can build those habits of living within your means now then it will help you throughout marriage and especially for the example that you teach to your kids.
Use these calculators to evaluate your debt and make sure to pay off the debt with higher interest rates first. So if you have student loans and credit card debt then stick to paying off your credit cards first and then focus on your student loans.
complete
A lot of students ask where should they get their funds to support them through school. Student loans and credit cards are two common areas where students look to go with expenditures. I think that both serve their purpose, but you want to make sure that you use them for the right reasons. These are really two different weapons in your arsenal that can go in your favor or against you. It really depends on how smart you are with your spending habits.
Realize first what they are and what purpose they serve. There are so many different types of student loans you can get out there and so many types of credit cards you can get out there too. A student loan is directly related to helping a student with the cost of tuition, possibly school materials, and room and board. It just depends a lot on what type of loan you receive.
A lot of it will also be based on what is the tuition requirement for your school, which can very from a $2,000 to $30,000 a semester. It is important to make sure you know too what rent will cost in your area along with other normal expenditures. Obviously going to New York or California is going to require more money for living standards than going to a school in Utah or Minnesota.
A credit card will also have a lot of different rates and usually have higher interest rates. Now you can find o% APR for a year or six months and it can buy you some time to use these cards. You have to be careful about changing rates. The beauty of a student loan is that you don’t have to start paying until several months after you are finished with school.
A credit card is going to require minimum payments, interest, potentially annual fees and other requirements. A credit card, such as college student Visa credit cards, can also help to build your credit faster than a student loan if you can use it correctly. Also these tend to be less tedious to get as far as requirements, there are many visa credit cards for college students with instant applications and easy approval.
Student Loans Vs. Credit Cards
This answer is decided by looking at what you are going to use it for. Chances are you are going to have a high tuition to cover and it would probably be a lot better to use a student loan to take care of that. If you can get room and board in that then that would be beneficial. You are going to have lower interest rates compared to a credit card and more time to make money before you have to worry about paying it back. This can help you focus on school more and the tasks at hand. You will have plenty of time to make money and start chipping away at that loan.
As far as a credit card goes, I think that these are also necessary. They are great to help you build your credit for the purchases you may make when you begin your career. These are great for everyday purchases like food and clothes. You just have to be aware of what your balance is and how you plan on paying it off.
This can be a complete success or a complete disaster. A lot of this will have to do with how frugal you are with your credit cards and how aware you are of your credit situation. Many students can go through a great deal of trouble because they don’t realize that this amazing interest rate can vanish instantly.
A credit company only has to give you a 15 day notice before they drop the hammer and the interest rate goes from 0% to anywhere between 15% and 30%. You could see a higher interest rate because they considered the grace period a big favor for you, but in reality it is just a pain in the butt because you might have piled up debt that you can only make minimum payments on and then you have no way to pay it off after they bump up the interest rate.
That is why it is important you go over the Terms and Conditions and find out if there are any changes that could happen during the next year or as long as you have the card. Sometimes you can find cards with 6 months or a year of guaranteed no interest. This can be a huge opportunity for you to leverage someone else’s money if you have some good strategies in place.
I personally got into a lot of debt after a failed business experience. It was a lot for a college student anyways. I felt as though I had no way out. I was at square one and I had to find a job and just try to get out of debt. Well I had gotten a cash advance of $10,000 for that year and I had to make some changes. I didn’t realize this until about August when I was down to about nothing and I had until the end of the year to pay off the line of credit. So I started improving my spending and found a good job. My situation improved, but I realized that it wasn’t going to happen by December of that year. So I found another company that gave the exact same opportunity for 12 months with a 0% APR. I took advantage of it and used the cash advance of this company to pay off this other card and it bought me another 12 months. Within the first couple months I was out of the hole and I was able to pay off the second card.
So you see that this can be a great opportunity to buy you some time to find out your financial life as long as you realize the terms of the card. Next you have to make sure you spend wisely and live a well budgeted lifestyle for your income. If you can do this then you will find 0% APR credit cards a blessing and not a curse.
