Credit Card Rules for College Students

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There are many credit card companies which primarily target students. They know that it can be extremely tempting for students to apply for credit as they struggle to pay tuition fees and to maintain a good standard of living. However, many of these specialist student credit cards can charge a fortune in fees and charges.

If you are a college student and you are thinking of applying for your first card then there are a number of things that you need to consider. Making the wrong choice could cause you to fall into serious debt. Therefore it is important that you know exactly what your options are.

Here you will find out everything that you need to know about applying for your first card. You will learn more about the benefits and the potential disadvantages of using credit cards to fund your student lifestyle.

Matt’s note: I advise people to avoid credit cards altogether, especially college-aged individuals, that said not everyone thinks like me so I still share information on how to use credit cards responsibly for the people who do use them.

1. Always Beware of Free Gifts

One very clever marketing tactic that creditors use to draw in students is offering a free gift. This could be anything from a free mouse mat to a discount in a popular store. Many people love to receive free gifts just for filling in an application. However, these free gifts are often covering something up. It could be that the card offers a higher than standard interest rate. Or there could be various other fees and charges that you will be hit with once you are accepted.

You need to sit down and look at the offer in detail. Know everything that you possibly can before you apply. Once you see past the free gift you will often see that the deal is not as great as you thought it would be.

2. Never Take on a Credit Card Lightly

You need to really think about whether you need a credit card before you apply. It is not a decision that should be taken lightly. Many students do not understand the potential dangers of a credit card. You may read about debt quite a lot and you may know it exists, but do you know how easy it is to fall into the debt trap?

If not, then now is the time to really sit back and think about it. Credit cards can cost you a lot financially and emotionally if you end up in debt. Therefore you really need to understand the potential consequences of applying for a credit card.

3. Always Read the Small Print

Most people are guilty of never reading the terms and conditions before they sign an agreement. However, when it comes to credit cards you really need to know what you are letting yourself in for. What will the fees and charges be? How can you use the card? All of this is explained in the small print.

If you don’t read the terms and conditions then you could find out the hard way the fees and charges that you are expected to pay. Look at whether there are late fees, application fees and processing fees before you sign up.

4. Shop Around

If you are intent on getting a credit card then you will need to compare your options. By shopping around you will see which student credit cards charge the least amount of fees. Some will charge you an annual fee, whereas others won’t. You mainly need to look at the interest rate of the card. What is the average fee and are there any cheaper alternatives?

Perhaps the worst mistake that many students make is to accept the offers that are given to them in campus. You will find credit card issuers often set up in college campuses to entice you into their deals. Usually these types of deals are not as good as the ones that you could find if you were to shop around. The creditor works on the basis that it is harder to say no to somebody who is there trying to sell you the card. Say no to these deals and log online to look for the best offers to suit you.

5. Always Pay the Balance on Time

One of the easiest ways to get into credit card debt as a student is to miss the repayment deadline. Ideally you should aim to pay the balance off in full at the end of the month. If you don’t plan on doing this then you should at least make the minimum repayments as early as possible. All creditors will charge a late fee. Therefore it is advisable to send off your repayment at least a week early. If you have a direct debit set up then you won’t have to worry about this.

If you know that you are going to be late paying back the balance then make sure that you contact the creditor. They will often be able to help you to arrange something so that a late fee is not charged to your account.

6. Pay Off as Much as You Can Afford

If you cannot pay off the balance in full at the end of the month, aim to pay as much as possible. It can be really tempting to just pay off the minimum each month. If you do this you may be saving money in the short term, but over time you will actually be paying more money. By paying the debt off in larger chunks, you will improve your credit rating, take less time to pay the debt off and pay back less money in the long run.

These are just some of the best tips that you can follow when it comes to student credit cards. Overall they can be beneficial as they can help you in times of need. However, it is important not to abuse them and to take your time when choosing the right student credit card to suit you. Always shop around, and never just fall for the free gifts that are offered by many creditors.

This article was written by Timothy Ng from Sydney, Australia who writes about personal finance for Credit Card Finder. He is genuinely passionate in educating young people on financial management and teaching college students what to consider when applying for a credit card.



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1 sophie

Thanks for the good information. I took a counseling class my first year of college and they covered a lot of the information given above. It was funny because the credit card companies would constantly be on campus offering free gifts to students trying to trick them.

2 Matt Jabs

Many of my T-shirts in college were free from CC companies. :)

3 Money-AU

Card issuers must now require students to show their ability to pay their debts. Unless the student is 21 years old and the issuer considers whether the applicant can make her payments independently, she must have a cosigner on the account. Cosigners assume liability for any charges made on the card before the applicant is 21.

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