Financial Articles

Are you a college student? If you are, then you will find student credit cards useful for your school related expenses. These credit cards are specially made to cater to the needs of college students, and are easier to acquire than other types of credit cards. They are useful for establishing credit, but can also cause some major difficulties if you don’t use them wisely.

Student credit cards can be very tempting for college students. Imagine being able to buy things that you want with your credit card. You can easily get carried away on your shopping sprees, and may not realize that you don’t have enough money to pay for your purchases. Unfortunately, the balance you charged for the things you purchased must be paid.

You will be charged for interest if you are unable to pay the full amount within a period of time. Credit card companies charge interest for student credit cards at a percentage of the over due balance. If you have a $100 balance and the credit card company charges an 18% interest rate: you will now owe $118 to the credit card company. The interest may keep on adding up, until you may end up paying only the interest and your credit balance will never be paid off.

If you are interested in obtaining student credit cards, you should examine a few important things. You should find out about the annual fee of the credit card offers. An annual fee is a lump sum that some credit card companies charge to their credit card on a yearly basis.

You should also look at the student credit cards’ interest rate and other fees. In some cases, the interest charges can send a credit card over the limit. When this happens, you will be charged some extra fees, and you can no longer use the credit card. It would be wise to compare the different terms and conditions of various student credit cards, so that you can find the best credit cards. Remember to use them wisely, so that you can get the most benefits from them.

Once a student graduates from high school and heads off to college they will be tempted with student credit cards. Student credit cards are aimed at college students. They are easier to get and are great for helping a student establish credit, however, they can also get a student into credit problems.

Before ever getting a student credit card a student needs to understand how credit cards work and how to avoid getting into debt. Credit cards offer a loan on purchases. A person can buy things with their credit card even if they do not have the money to pay for it. However, eventually the balance charged must be paid back. Most credit card companies allow a person 30 days to pay back the amount charged.

If the person fails to pay off the full amount within that time frame the credit card company charges them interest. Interest is charged at a percentage of the overdue balance. So if a student has a $100 balance and the credit card company charges 20% interest the student now owes $120.

Over time the interest keeps adding up and eventually if the student is only paying the minimum amount due they are in reality only paying off the interest and their credit card balance is never going to be paid off. This is why it is important for a student to understand how credit works before ever signing up with a student credit card.

Once a student decides to get a student credit card they need to look at a few things before making their choice. They need to check out the annual fee. An annual fee is a lump sum the credit card company charges to their credit card once a year. Some cards do not have an annual fee. additionally they need to look at the interest rate and other fees. Most accounts charge fees for going over the issued credit limit.

Sometimes interest charges can send a card over the limit. This not only causes extra fees, but also means the student can no longer use the credit card. Paying attention to the different terms and conditions of the card will help the student to choose the card that is best for them.

Student credit cards are a great way to establish credit. A student should be careful, though to make sure they are responsible when using their credit card, so they can get the benefits of it, not the problems.

(Consumer Recovery Network) - This week’s edition of Debt Bytes features a story submitted by a woman in my local area. She has come a long way in her understanding of debt and credit, the good, the bad, and the unbalanced.

She came to her understanding over time, as a result of research and her own experiences. One of the intentions of Consumer Recovery Network is to stream line a consumer’s ability to gather information so that they can compare and understand the options available to them.

The following was submitted to us by a Debt Bytes subscriber:

I will always remember my Mom scrambling at Christmas time, or more appropriately, Christmas Eve. She would drive herself crazy wondering what everyone wanted and where she could find it at the last minute. My sister and I were always, reluctantly, in toe. It never once occurred to Mother that she couldn’t afford to buy all these gifts.

I was just a kid, so I didn’t really care how she paid for any of these wonderful “things” - I just hoped I had something cool under the tree. She charged every perfume bottle, every book or CD, every toy. She would joke with the cashier, “Luckily, I don’t have to worry about it until after the holidays!“ Logical? Maybe.

As it turns out, it wasn’t so logical. I later learned she had 9 store credit cards that were either at or over their limits. She didn’t have a glamorous or high-paying job, so she hoped for good tips. She’d bury herself in credit card debt at major intervals during the year. School shopping and Christmas were the two that I remember the most. It didn’t leave her much of time to catch up before the next holiday or school clothes emergency.

I am now a parent and consumer myself and, not learning from my Mother’s sad experience, I had to fall into my own credit hole as a 20-something. I was literally right where she was, asking CCCS for help. To some extent, that was helpful, but my credit was shot. I had to start on my own, from scratch. It took me two full years to get my credit score back up to a “respectable number”. I must admit, though, dealing with the credit bureaus was more than just frustrating, it was downright maddening! It consumed a major percentage of my time, not to mention, probably many dollars in postage in those two years (“certified mail”). Anyway, I got through it. I now monitor my credit regularly and I recommend everyone monitor their credit reports, even if just for the sole purpose of learning how your score is affected, how often, and why. It’s pretty surprising!

I am now a 30-something who takes her credit very seriously. I don’t buy what I can’t afford. I DO have a few store cards and one major credit card, but I pay them all off monthly, which, in turn, saves me any interest rates and late fees those nasty little creditors may want to charge me with. It also keeps my credit report looking nice and shiny. I don’t need my credit and I think that’s the big point here. It’s not there to pay for my bills or vacations. It’s there to help me build my credit, so that if a major purchase, like a car or home comes up down the road, I’ll have something to bargain with – my great credit rating.

So, next time you check your mailbox and Capital One or Citibank has sent you an incredible “0% Interest” offer, do yourself a favor and show them 0% Interest!

Our goal is to assist consumers in considering how their options weigh up to their goals. The credit decisions we make today can have long range positive or negative affects. No matter where you are at financially, the more knowledge you have the better prepared you will be. Visit the resource section of our web site and begin or further your education today.

I would like to get your feedback on this or any previous debt bytes articles. CRN is always interested in your feedback, insights, and credit anecdotes.