Comparing the Cost of Credit

Teens and Choosing Credit

Teens often find themselves lost and confused when they are approached with credit card offers. The credit companies have high interest and other weird fees, they also talk about high credit limits and they promise benefits and rewards. But no matter what the companies say, teens should focus on important factors when they consider and or sign up with credit companies.

Annual Percentage Rate

Annual Percentage Rate (APR) is the number that tells you how much money you are paying to the company on top of the money they loaned to you. It is important to hunt for a low APR so you don't have to pay back the money you borrowed plus interest.


It's best to try to avoid credit cards that use any of the fees:

  • Over-the-limit-fee: Is a large fee for spending over your credit limit.
  • Late fee: Is the penalty for making a late payment.
  • Universal Default: Is the most dangeous fee. It is a clause that if added to the agreement, allows the comany to skyrocket your interest rate if you make even one late payment.
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Each Credit company offers rewards and incentives for signing up with them. These rewards can even offset some fees or high ARP.

  • Wide range of stores: Not all store accept credit card, so it is important to make sure that your credit card is from a popular company.
  • Grace period: A grace period is length of time where you accumulate no interest. Some people take advantage of long grace periods, such as people who pay off their cards each month, therefore you can make purchases without any interest.


"Comparing the Cost of Credit - Teenagers and Credit: Everything You Need to Know." Comparing the Cost of Credit - Teenagers and Credit: Everything You Need to Know. N.p., n.d. Web. 15 Dec. 2014.