While preparing for college, or even before, it’s not uncommon for students to get bombarded with credit card offers. It’s not even uncommon for colleges to provide sign-up tables where you may be offered a gift just for signing up for a card. Here are a few things you should be aware of before signing on the dotted line for a credit card.
Your Credit’s Health Counts
Whether your credit is good or bad, it makes a difference. Having a credit card can be a good thing if it’s used responsibly. Make no mistake, your credit, good or bad, can impact your life. While applying or attending school, good credit may be the difference in getting a loan to cover tuition, or room and board costs.
Some Credit Cards May Charge an Annual Fee
Having a credit card may come with the expense of an annual fee. You’ll have to pay for what you buy along with the additional annual fees. For some, the annual fee is simply the cost of having the card in their wallet. Try and avoid those credit cards that charge an annual fee.
Take Time to Shop Around
There’s an entire economy of credit card companies that are hoping you’ll be their next customer. Their sales tactics are legendary, such as offering specific freebies for signing up. Shopping around can give you an edge in finding the best card with the best annual percentage rates (APRs). This is the amount of interest you’ll be required to pay if your card’s balance isn’t paid in full each month.
A credit card doesn’t equate to having free money to spend. When the bill comes, it must be paid. If the bill isn’t paid on time, your good credit can be dinged. Not paying your bill on time or exceeding your credit limit, may mean that you’ll be charged additional fees along with interest.
Your First Credit Card
The rules have changed with respect to students and credit cards. Students with no income may have to rely on their parents to co-sign if they expect anything close to a reasonable interest rate. When you purchase from a merchant, credit card ACH processors are companies that handle the transactions. These ACH processing company rules will have to paid attention to as well.
Using your credit card wisely can save you from having to deal with debt later on. Most importantly, wise handling can save you from credit problems that can negatively affect your life and future finances.