Selecting your first credit card
Credit cards are a rite of passage for young college students, ushering them into adulthood with increased spending power accompanied by financial responsibility.
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To help them learn the ropes, many credit card lenders provide student credit cards that are designed specifically with the needs of college-age cardholders in mind.
For example, most creditors are selective of who they offer a traditional credit card to. Creditors look for a good credit history and a healthy income. However, students are most likely of all applicants to have little or no credit history, making student credit cards an ideal choice for young adults who want to establish and build a positive credit rating.
The terms for student credit cards vary by lender, but many cards offer no annual fee and introductory APR periods, during which time cardholders can charge with little or no interest. After that time, the APR will adjust to the card’s normal rate, unless the cardholder misses one or more payments. Account defaults may result in penalty APRs.
Students who want to achieve the lowest possible APR rates should pay on time, as well as consider using a cosigner to establish the account. A cosigner is a person with a healthy credit history that is willing to put his or her credit history on the line to help you improve yours. A cosigner with a positive credit history can improve a credit card applicant’s chances of approval and influence the new credit card’s APR.
Students should shop and compare student cards before choosing one. Many credit cards offer bonuses and cash back just for using the card. Cash back bonuses often range between one and five percent, and some cards also offer other perks such as rewards for using card. For example, some student credit cards reward cardholders with points for every dollar spent. After an accumulation of points, the cardholder may use the points to shop for merchandise, event tickets or travel accommodations.
Student credit cards.com @ June 2, 2011