What students should know about credit cards

Find out how to check for good deals on credit cards and build your credit rating.

11:08 04 May 2013

Many students find themselves needing to establish a credit rating. One of the easiest ways for them to do this without having to make a major purchase such as a vehicle or mortgage is by acquiring a credit card.

 

Universities are trying to offer incentives to encourage foreign students to attend. Even these foreign students may find themselves in need of a credit card or at the very least a debit card as a safer way to do their shopping around campus than by carrying regular money.

 

What should students watch out for when applying for a credit card?

 

• Interest rates—look for low interest rates, typically the lower the better

 

• Introductory term—offers with lengthy introductory terms typically mean more savings in your pocket over the long term.

 

• Fee schedule—students will want to stay aware of the credit card fees that may be charged such as over the limit fees, late fees, and monthly or annual fees.

 

• Credit limits—if you’re thinking of getting a credit card but you aren’t sure how well you will do with one, check to see if you can opt for a reduced limit and raise it without penalty later.

 

• Grace period—if possible it’s a good idea to pay off your balance during the grace period to avoid any finance charges or fees, but your credit rating also doesn’t build as well if you make payments  on a credit card in that manner.

 

• Penalties—this is slightly different than fees, but it essentially means that if you have a late payment you could put your introductory terms at risk, or even incur a very high interest rate.

 

A credit card will probably always be a necessity for students as well as for anyone who is trying to build a good credit rating. As long as they compare these differences to find the best offer available, it can be a beneficial experience.