Information About Credit Cards For Students
One of the biggest stepping stones in the average American lifestyle is going to college. All children dream of the day they can leave the nest and go somewhere they feel that they are self sustained. However, self sustenance requires a level of income that many college students just don't have. This is leading college students to think about getting a credit card. Is this a good choice? The answer really depends on the individual at hand.
Not all consumers in college are at a point in their life that they are able to control their own spending habits but some are. Consumers who feel that their level of self control will stop them from obtaining overwhelming credit card debt should be fine with getting one but Americans who feel if they have the available funds, they will spend them should not have a credit card.
Here are a few things to consider for people who feel they are ready for a charge card:
The first thing to look at when researching credit card offers is the annual percentage rate. Well, let me rephrase that, people need to be aware of all APRs attached to charge card accounts. It is a common misconception that charge card accounts only come with 1 annual percentage rate. Unfortunately, this is not the case! All credit cards have multiple APRs and here are the explanations:
1. Standard Interest Rate – The standard APR on a credit card is also known as the purchase interest rate. This is the annual percentage rate that consumers will pay on balances obtained through standard purchases such as groceries, gas, ect... However, the standard annual percentage rate only applies if Americans do not default on their credit card accounts. If a default occurs, the standard APR will be overridden by the default APR on the charge card.
2. Default Interest Rate – The default interest rate is also known as the penalty interest rate and for good reason. Default annual percentage rates apply to all balances on credit card accounts when Americans default or do something wrong with their credit card account. Defaults include late payments and exceeding the credit limit on charge cards.
3. Introductory Interest Rate – The promotional APR is also known as the promotional APR. The promo interest rate applies to balances for a short period of time starting on the date the credit card account was approved. The introductory APR is used as a marketing ploy and should not be the deciding factor for any credit card decision whereas this annual percentage rate will only last from 6 to 12 months. After the intro period expires, all balances will start to accumulate the corresponding interest rate for the balance type.
4. Balance Transfer Interest Rate – The balance transfer interest rate applies to balances accumulated by paying other credit card accounts off. Hence the term balance transfer annual percentage rate.
5. Cash Advance Interest Rate – The cash advance interest rate is applied to balances accumulated through cash advances. The cash advance interest rate is usually higher than the standard interest rate which is why I never advise the use of credit card accounts for cash advances. Cash advances include any transaction that ends in an exchange of cash such as ATM withdrawals and requesting cash back after a purchase.
Now that you have a clear understanding of APRs, you should be fine with using a charge card as a student!
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There are those out there that are a little weary about credit cards and their usage. Those people who have enjoyed using credit cards enjoy the convenience and not to mention the rewards (cash back, miles, points) that they receive. Others may not have enjoyed the usage from overspending on their card. College students will need to use credit cards to pay for tuition, books, room and board, etc. There are several things to look for when applying for a new credit card.
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