Credit Card Need-to-Know

The Good, the Bad, and the Confusing

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A college student's take on credit cards

"Considering my friend is $900 in debt right now, I think credit cards are bad. It's not a good idea for students to have them because we're broke and that's money we don't have to pay until it's due.. then we stress. I guess some students could handle them responsibly if they're only for emergencies. Sure. But some people just go and swipe it for everything and then it adds up big time." -T.E.

What you should know

Students may think credit cards are either really cool or very daunting. It's a symbol of growing up, but there is a lot of figuring out to do before you can get one(or the RIGHT one)!

A credit card is like a loan that you pay off to the credit card at a later time.

It is different than a debit card that pays for purchases directly through your account.

Credit cards offer many different features and rewards, so make sure you find one that is right for you.

Credit cards are great for purchases where you don't have all the necessary money at the time of purchase, but too many of these purchases without paying off the debt can cause big trouble.

What you should look for

Students should look for a card with characteristics tailored to them. Because most students will be using their credit card when they go off to college, their card needs to be for a company that can follow them wherever they go.

They should look for low APR and annual fees.

What you should be aware of

Credit card companies may entice you with offers of no annual fees or 0% APR, but make sure to read the fine print. Companies that offer that will usually bump up the rates after a certain period of time. Make sure you know what you will have to pay for using their resources in a few years' time.

Companies can change these rates, especially if you miss a payment. Make sure you know all the risks before signing up for a card.

Important Credit Terms

APR: Annual Percentage Rate (the interest rate charged)

Annual fee: a charge for using the company's features

Balance transfer fee: a charge for paying off a card with the balance of another card

Cash advance: a temporary loan with very high interest