College Kids and Credit Cards
There is a huge by various banks in the credit card business to sell college kids on their credit cards. They send their representatives to campus with huge displays and free giveaways. But let the buyer beware! Getting into debt can be dangerous, especially before you even have a real income. Annual interest rates on credit card can vary quite a bit, since you are in high territory anyway. The prime rate is about 5.25-percent and it hasn't even gone up since June, but credit card rates for top customers are 11-percent, going up to 15-percent or more. Students should try to get the lowest interest rate they can, and also look for cards with no annual fee. Unless the student expects to make huge purchases, forget about all the offers of frequent-flyer miles on airlines, and cash back. Of course, if it's cash back on gasoline, and you drive a car, you may be forced to weaken.
The idea is to use credit cards for the convenience of not having to carry around cash. Also certain types of purchases are much easier to make on credit cards. A credit card is a necessity if you want to rent a car. All and all, it can be a pretty dangerous business, because you definitely do not want to mess up your credit rating when you graduate from college and get a job in the real world. What's a possible solution? Get your parents to give you a credit card that is an extension of their credit card. It doesn't have to be the same account as them, in fact, it is better if they get a credit card in their name just for you, don't use their copy of the credit card, and give you a copy for your use. Then, the little spies get to monitor everything that you're spending money on, at least on credit, and you aren't force to risk your credit rating until you are ready to.
Going online to compare student credit cards can be fun, but the interest rates are definitely getting up there. The interest rates vary from 17-percent to over 18-percent. What else is involved when you read the fine print on the contract is not something I can tell you, but you better take the time to read that fine print if your know what is good for you. Let's look at a more whimsical option, the Discover, Student Tropical Beach Club. Not bad, but I don't think they give you a free spring break trip to Club Med.
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