Student Credit Card Rates

Almost every credit card company in the nation offers student credit cards. Why is this? Because they know that student credit cards can get them the most return for their money. Here’s an example as to how they do this: let’s say that Johnny graduates and goes to college. He gets a student credit card that has a $500 limit on it. He starts buying things and before he knows it has spent $300 of the money. He then decides that he’s not going to spend any more. For the first few months, he puts down the minimum payment on the card every month. About six months in, however, he’s spent another $150 on the card and has stopped making his minimum payments.

Over summer break Johnny receives a letter from the credit card company while he’s home. The company says that because he has missed payments, they’re raising his interest rate from 12% to 25%, and that with the fees he’s accrued from missing his payments, he now owes the company over $1,000. Unfortunately this is the case for many college students. What To Consider

Before you get a student credit card, learn a bit about student credit card rates. These rates refer to a few things, including the interest rate that will be on the card and any fees that you’ll have to pay if you miss a payment. Find out what the normal interest rate is for your area so that you know what to expect, and then see what type of student credit card rates the credit card company is offering. The rates may be a bit higher than your typical credit card rates because you have no credit history, and this is to be expected.

Find out as well what type of fees that you’ll be responsible for paying if you miss a payment, and if the company has the right to up your interest rate if you’ve missed a payment as well. Knowing these types of things will help you to appreciate the student credit card rates that you have a bit more and to avoid missing a payment.

Before you sign anything, make sure that you read the fine print, and once you get a credit card, make sure that you use it wisely and put money on it once a month.