How to Find Out What Your Student Credit Card Offers Are Really Saying
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by: barrywaters
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Word Count: 485
Now that you are a college student, credit card companies are going to court you with a passion you only wish you could see from prospective boyfriends or girlfriends. As far as the credit card companies are concerned, you are a dream date: young, with an unmarked credit report and (they hope) bound less naivete about credit cards. They expect you to accept a credit card with an attractively low introductory rate, run up huge bills, then owe them tons of cash when the introductory period ends and your interest rate skyrockets. Lets disappoint them.
The first tip is to not be suckered by that bright, shiny "0 percent interest rate" printed on the front of the brochure. That is the introductory rate. After a short period, usually just six months, it ends, and now you have to pay the credit cards real interest rate. Student credit cards typically have somewhat higher rates, currently running from about 13 percent to about 20 percent, with default rates that shoot up to about 25 to 31 percent if you pay a bill even a day late. The new, higher interest rate applies retroactively to all your purchases, so even if you charged an item when your interest rate was zero, at the end of the introductory period you must pay 13 percent (or 19 percent, or 30 percent) until your entire balance is paid off. Once the interest starts compounding, you could pay two or three times as much as the item is worth.
The key to disappointing a credit card company and keeping your wallet fat is to get the card with the lowest regular interest rate, then watch your spending as though you were already paying the full regular rate on your purchases. To find a credit cards real interest rate, look for the fine print or for a chart that illustrates the rates. Look for the standard cash advance annual percentage rate (APR) and the standard purchase APR. These are the rates you will pay after the introductory period ends. Compare all the student credit card offers you have received, paying no attention to the introductory rates and all the frequent flyer miles or other frills. The only numbers you care about at this stage are the standard purchase APR and the standard cash advance APR.
Once you have found the credit cards with the lowest regular interest rates, read the rest of the fine print for catches like annual fees and high default interest rates, and use it to narrow your selection. Now that you have a few likely offers with low interest rates and no nasty surprises, you are free to consider rewards packages and pick the student credit card you like best. Have fun with your new credit card and start laying the groundwork for your future credit... on your terms.
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More information regarding credit cards for bad credit, visit getsmart.com/credit-cards.
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