Are You Ready For A Credit Card?
The Advantages of Credit Cards
- Credit cards help build a positive credit history which in the long run enhances your ability to get a loan, purchase a car, rent an apartment, and purchase a house
- Security in case of emergencies
- Reduces the need to carry cash and/or checks
- Convenience
- Free insurance and protection on purchases
- Grace period to pay off your purchases
Are You Ready for a Credit Card?
As a student, you must decide whether you can handle the responsibilities of a credit card. Here are some of the questions you should ask yourself:
- Do I need a credit card?
- Why do I need a credit card?
- Can I afford a credit card?
- Will I be able to pay off the balance every month?
After deciding that a credit card would fit your best interest, feel free to shop around. Don’t feel stuck to one card. Be a smart consumer and do your research before jumping in. Here are some of the things to look for in a credit card:
APR (Annual Percentage Rate) – A yearly rate of interest
Annual Fee – A bank charge for the use of the credit card
Grace Period – Assuming you start with no debt, the interest free time between the transaction date & billing date
Credit Limit – The maximum amount of charges that can be applied to the credit card
Rewards – Many cards offer benefits in the form of cash back, airline miles, gas, etc.
Helpful hints and tips
Remember, there is a good side and a bad side to credit cards. Credit cards can be very helpful in emergencies but, they can be a nightmare if you can’t pay off the balance every month. Here are some helpful hints:
- Look for the lower interest rate cards. Some cards charge a ridiculous 20%+ interest and you want to try to avoid those as much as possible.
- Check your statements ALL the time. Watch for fraudulent charges. Take care of them immediately.
- Keep an eye out for an annual fee. Many cards offer no annual fee but some do.
- Be careful of introductory offers. Some cards offer very generous rates, but after that introductory period expires, your rate may shoot up like a rocket.
- Try not to do a cash advance as it involves hefty fees and the interest accumulates the day they hand you the money.
- Think before you buy! If you can not afford it now, chances are, you will not be able to afford it at the end of the month when your statement comes in.