Evaluating Credit Card Offers for College Students
Everyone has told you that you shouldn't get a credit card while you are in college. But the reality is that having a credit card might not be a bad idea - IF you use it responsibly. The first step in making sure that you can do this is in knowing yourself and your financial tendencies and making sure that you aren't going to be irresponsible with your card. And the second step in using your credit card responsibly is making sure that you select a credit card company and plan which offers good terms and benefits to you. Here are the things that you should consider when evaluating credit card offers and considering whether or not they are right for you.
REASONS THAT YOU MIGHT WANT A CREDIT CARD IN COLLEGE
Even though college students are often deterred from getting credit cards, there are several reasons that you might want to get a credit card while you are still in college. For one thing, money is definitely tight during the college years and having that extra help is never a bad thing, especially in the event of emergencies. For another, money in college often comes only once or twice a semester (in the form of financial aid disbursement) which means that there are certain times during the semester when it helps to be able to access cash that you can pay back later. And finally, when you get out of college, you may want to start making some big expenditure (cars, homes) and it's important that you've built up good credit.
ARE YOU READY TO GET A STUDENT CREDIT CARD?
Did you pay attention to that last section of this advice? It's important that you build up GOOD credit. This means that you need to make sure that you're financially ready for the responsibility of having a credit card in college before you actually go ahead and get one. Here are some signs that you're probably ready to get a credit card:
- You know how to budget your money.
- You pay your other monthly bills (such as your cell phone bill) on time regularly.
- You have a thorough understanding of the problems that you can cause yourself when you make mistakes with credit cards.
- You have obtained and paid off loans, such as those for cars or other large expenses.
- You have some source of income during college that isn't loans - a part time job, support from parents - and are interested in getting a credit card just to supplement this income in case of emergencies.
- You are willing to take the time that is necessary to research good credit card offers.
EVALUATING YOUR COLLEGE CREDIT CARD OFFERS
You want to make sure that the credit card that you decide to get, if you decide to get one, is one which is good for you. Here are some things that you want to look for when you are evaluating credit card offers:
- Interest Rate. Most people know that they want to get a low interest rate, but what's a good one? Well, that depends ... credit card companies offer different rates for cash purchases, balance transfers and cash advances. Figure out what you are most likely to use your card for and get a low rate on the area that reflects that. If you can secure a rate that is under 10% and which won't increase (often, low interest rates are increased after just a few months), then you're on track.
- Annual Fee. There is almost never a good reason to pay an annual fee on a credit card so check to make sure that the ones you're looking at doesn't have one.
- Hidden Fees. When evaluating your credit card offers, make sure that you look at fees that you may be charged over time. Late payment fees and over limit fees are common. A card that has these fees may still be a good card ... but if you know that you often make late payments, you'll want to find a card that doesn't have a fee associated with that.
- Legitimate bank. The best credit cards are those that are associated with banks which you can access locally. If you're starting to evaluate credit card offers, you may want to start with a stop at your local bank and see what they can offer you. Make sure that they know that you're a student as many banks have special offers for college students.
- Special offers. College students are often given special offers on credit cards. Make sure that you look at all of the terms carefully on these cards.
The main thing to remember when you're evaluating credit card options is that you need to know yourself and your spending habits inside and out before you start looking at credit cards. This will help you to carefully select the credit cards which have the best terms for your situation and spending habits. Take the time to do your research and you should be able to find a card that will serve you well in your college years.
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