Any older adult can tell you that when you're in college, you have so many things on your to-do list, that your head spins and sometimes, the last thing you want to do is do research on things you shouldn't have to. Today, I'm going to show you some simple ways on how you can start building credit and where you can find these cards in order to start gaining adult financial responsibilities.
A credit card is a great way to start you financial adulthood. It will allow you to build your credit, which in turn will help you receive car loans, mortgages, and any other type of loan in the future. It's important to remember that you shouldn't treat the card like it's a piece of plastic but instead, you should treat it is as if it's your future. This means you should pay it off in full each month, and only spend what you can afford month after month. If you can accomplish this, you will be on the path to a debt free future. Now, let's get on to the good stuff.
The college campus ? I'm sure by now if you're attending school or you're about to, you see a credit card company on campus every single day. While a nice t-shirt or free burrito sounds nice when you apply, you have to remember that you can only have options to the one credit card they are offering. You're going to want to stay away from these tents because like anything else you see in life, there are choices! Let's say there was a booth with one t-shirt and they would give you this t-shirt if you gave them $10. The first thing you're probably thinking is, ?well, there are millions of other shirts out there, why would I just go after this one?? We can use the same concept with the credit card. If you do you research and find that particular card is the one for you, and then I say sign up for it and take advantage of the freebies.
The internet ? In my opinion, the internet if the best place to find your first card. All it takes is a little search on a search engine like Google. Phrases such as ?student credit cards? or ?college student credit cards? will show you a list of wonderful sites that layout every card you're eligible for. This is the best way to browse through them and see exactly what you like. You'll soon find out that there a lot more cards designed for you than you thought.
Your friends ? If you know of some friends or relatives that recently went to college, this is a great opportunity to ask them what kind of card that they applied for. Ask them if they like it and how the customer support is, etc. Most of the time, you'll get a good understanding if they like the card or not. If you receive a positive response, see if the car suits your needs.
You need to look for a low interest credit card when it is most likely that you will not be making the payment or only be making partial payment within the grace period or the due date. By using your card what you are basically doing is that you are taking a short term loan without any interest as long as you are paying back this loan within due date. Credit companies allow you to make partial payment and charge a certain percentage as interest on the remaining value.
There are many companies that offer low interest rates. Some of them offer 0% interest for the first few months to attract customers. After the first few months you will be charged a certain percentage of interest. In certain cases the initial interest will be set low for the first few months and people tend to forget completion of the offer period and continue to spend excessively.
Not many are aware that the interest rates vary for purchases and cash advances. Interest on the cash advance is much higher than the interest on purchases.
Initially set credit limit is normally increased after a card holder proves a good credit history. This is to retain a good customer. Sometimes, if you are lucky enough and have an excellent credit history then you might get low interest rate offers.
Whenever you come across a low interest credit card offer it has to raise an alarm in your mind on what the card companies are trying to do to you. They are inviting you to spend more than what you can afford and by offering low interest rates they unconsciously de-motivate you from paying the bills in full. The ultimate benefit is the money earned through the interest value gained. By offering 0% interest rates for the first few months, they not only entice you to sign up but also that you get used to spending without worrying about the interests. You continue to spend even after the offer period, leading to huge monthly bills, ending up in debt.
Statistics show that most card companies earn their profit mostly through the interest paid by their customers and not on their yearly subscription fees
Card companies when they keep their interest rates low, they tend to reduce the grace period for the payment of bills. So it not always that advantageous to have the interest rates to be lower while grace period for the payment of bills is shorter. It really depends on how you would like to use your credit card.
Summary: Low interest credit card helps you save a considerable amount of money when you have huge financial commitment and cannot meet your monthly credit card bills fully. It may not be that advantageous feature if you are going to pay your monthly bill regularly. Then, what would be highly beneficial here is longer grace period. Keep a close check on your usage as lower interest rates might invite you to spend more than what you an afford leading to bad debt.
Both Tom Tessin & Jeff Moynihan are contributors for EditorialToday. The above articles have been edited for relevancy and timeliness. All write-ups, reviews, tips and guides published by EditorialToday.com and its partners or affiliates are for informational purposes only. They should not be used for any legal or any other type of advice. We do not endorse any author, contributor, writer or article posted by our team.
Tom Tessin has sinced written about articles on various topics from Mileage and Fuel, Education and Finances. Find and more of Tom's work at FINDcollegecards.. Tom Tessin's top article generates over 673000 views. to your Favourites.
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