Keeping Your Credit In Good Standing!
Are you thinking about applying for a credit card? Did you know qualifying for a student credit card is not based on your income? If you are 18, you can usually qualify for one without your parent’s approval. That means you can get a student credit card with a fairly high credit limit, even though you do not earn enough to pay for it.
Credit cards will affect your credit rating, so you will need to consider this decision very carefully. Not paying your bills on time can lead to a poor credit rating, which may hurt your ability to buy a car or rent an apartment in the future.
However, there is a positive note, credit cards are definitely a good way to establish good credit. To do so, keep your balances low and pay them on time. In addition, it is a good idea to pay them off monthly! A good rule of thumb is to never use more than half your balance and pay it off every month. This will help your credit history and credit report scores.
To make an informed decision, consider the following before completing an application:
• Read the fine print. It provides important information on late charges, over-the-limit fees, annual fees, and interest rates. Some cards have late fees as high as $30.
• Can you afford the minimum payment? Even if you do not have a job, you will be required to make the minimum payment. Not doing so will result in late charges and could increase your interest rates.
• Beware of introductory interest rates. Companies may advertise a low interest rate but it often jumps substantially after a few months.
• Do not apply for a card just because they are offering cool, free stuff.
When considering a student credit card, it is very important that you think about all the facts involved as well as the consequences that could be applied to you in the future, should you have a tough time making the minimum payment.
Once you have made that decision and feel you have the were for all to make the payments and be adult about how you plan to use the card, I say go for it. A student credit card used wisely is a very good thing. As stated above it will serve to help your credit rating. If you keep in your mind to use it on things that you have to have rather than things you think you have to have or just want, you should be ok.
Just remember when you do make that purchase, ask yourself, do I have to have this for school or to continue living? If the answer is yes, than go ahead use that student credit card. Things you should not be using it for is that daily star bucks coffee or the pizza for lunch. You should have other financial tools in place for such items, or you may have to eliminate them completely for now.
Just make the right decisions now, you will thank yourself in the future when you decide it is time to buy that new car. Your credit will be good and you will have no problems.
Student credit cards.com @ May 26, 2008