Is Obtaining a Student Credit Card a Good Idea?

credit cards

Is Obtaining a Student Credit Card a Good Idea?

In this busy world, a good credit score is essential. Student credit cards are terrific for building credit, but they should be applied for and used with caution. While some are paid for by the parents of the student, many students have jobs and pay for their own credit cards.
Before applying for a student credit card it may be a good idea for the student to open a checking account and learn about handling money responsibly. Below are some facts to consider before signing on with any credit card company.
Check to see if there is an annual fee on the student credit card. Many companies will charge a fee every year, and this goes onto your balance.
Find out what the default rate is if a payment is missed. It is never a good idea to miss a payment but it does happen, and credit card companies charge a much higher interest rate when this occurs.
What is the interest rate for purchases on your student credit card? There may be a higher rate than what you were quoted, be careful here and do some research.
Check out over limit fees and late fees. This can add a pretty penny to your balance.
Make sure you keep track of when the student credit card bill is due and mail your payment a week before to avoid late fees.
What is the grace period on your student credit card? This is how much time is given to pay off your balance before interest is added on the balance.
When you have more than one student credit card, consider transferring the balance from the card with a higher interest rate to one with a lower rate. This can save a good deal of money.
Read the terms over carefully before applying for a student credit card. Go over everything carefully to make sure you are not paying too dear a price in fees and charges simply to have the card. If the terms are what you are looking for, only then should you sign up for the card.
Be sure that you read your monthly statement very carefully. Make sure it contains no errors or fees you have not agreed to.
All told, student credit cards can be a great idea for those who want to start establishing a good credit rating. Caution should be used where credit cards are concerned. Balances can add up quickly and you don’t want to start out with a negative credit rating.

Student credit cards.com @ May 21, 2008