What You Should Avoid with Student Credit Cards : Credit cards are one way that you can begin to build credit. Credit cards are one way to build your financial future but they are only one possible solution to this. Credit cards are often a double-edged sword and this article will give you some pointers on what you should avoid with student credit cards. The first key on what you should avoid with student credit cards is to not sign up with the on-campus teams who often show up. When choosing a credit card, you want a company who you have done business with or your parents have done business with. If you have any problems with your credit card, you want to have confidence that your issue can be handled in an efficient manner. With on-campus credit cards, how can you be sure that you will get a satisfactory response? The one exception is if a bank comes to your school. You may want to have your credit card through your bank because you have the opportunity to talk with a banker about your credit card in person. This may be a great option if you do not want impersonal service and having to dial a 1-800 number every time you have an issue.
What You Should Avoid with Student Credit Cards
The second key is to look for a card with low fees or no fees whatsoever. Credit card companies make no money no matter what you do with the card. When you swipe the card at the grocery store or at the bar, the card company makes money. To give you a little background, if you spend one hundred dollars at Wal-Mart, Wal-Mart only gets $96 or $97 out of that $100. The other money is split between Visa or Mastercard or whoever’s emblem is on that card with whatever company you have the card through. Paying no fees should be a bargaining point because credit card companies are vying for your business. You should not have to pay for the right to do business with them. The third key in what you should avoid with student credit cards is to not choose your first option when a card is presented to you. Take a couple of hours and compare the different student credit cards that are available to you. Each card is slightly different and some of the different features can matter to you on what you get with the card. You may be able to find a card which offers rewards for you using it. This goes back to the first key in that you should know what your options are and taking advantage of a free t-shirt doesn’t help you much in the long run. Hopefully these three keys in what you should avoid with student credit cards give you something to think about. It comes down to having a relationship with a company you want to do business with and keeping your costs down. If you can find rewards, that is an extra incentive to work with a credit card company.
What Credit Means to you: from a Student to a Grown-Up : It is always talked about how important good credit is for everyone. You would be amazed how critical good credit is to you when looking at your life. To properly illustrate this, a trip will be taken down your potential life to see where credit can help you or trip you up. When you graduate from college, you want to move to a new city and live on your own. If you have no credit whatsoever, you must have a co-signer who is willing to co-sign so that you can get a new apartment. If you have bad credit, this may result in being denied on getting the apartment you want to you may have to settle for an apartment in a less desirable part of town. When you graduate from college, you may want a new car. If you have no credit or bad credit, you may also have the same problems as described in the previous paragraph. If you are approved but have only marginal credit, you may have to pay a higher interest rate such as 12-14% when many people with good credit can find great cars at dealerships and receive 0% or buy a used car and receive 6% from their bank. Do you want to pay 12-14% for your new car? It is less money that you get to keep every month.
What Credit Means to you from a Student to a Grown-Up
Let’s move to the job. Depending upon where you may want to work, you can potentially have to agree to let the company check your credit. This may result in being denied a job if your credit history is spotty. This probably does not happen but competition for jobs is fierce enough without worrying about your credit history coming into play as well. The credit check may come into play more when talking about jobs for financial institutions if you will be dealing with people’s money and advising people on money. Move to the next phase in your life: the American Dream. You want to purchase a house. If your interest rate is one percent higher as a result of bad credit, this can cost you around an extra hundred thousand dollars in interest depending upon when you pay your loan off and how much your loan is for. This may not seem fair but you can cost yourself a hundred thousand dollars just by not paying your bills on time and managing your credit responsibly.
This is just an example of a few different situations in your life where credit can have a major impact on what you want to do and what you have to pay for loans. Would you rather keep more money in your pocket or pay it out to companies? There is such a penalty if you do not manage your credit that it does not make sense to manage it so that you can have the most amount of money you possibly can. Do you want to cost yourself the chance at a great career because it is a requirement to check your credit before you receive the final offer on that new job? These are serious questions which you must ask yourself because it takes time to build a good foundation but after the initial efforts, there is little effort which is needed. The good habits are in place to build and maintain the good credit.
Students: Consolidate Loans Now To Save Thousands In Interest. Going to college is about to get even more expensive. At a time when rising tuition costs already weigh heavily on future college graduates and their families, Congress recently passed a Bill raising interest rates on student loans and cutting $13 billion from the federal student loan program. These higher rates promise to have a significant impact on the cost of repaying student loan debt for years to come. The Bill impacts Stafford loans -popular because they require no credit check or test to qualify-and PLUS loans, available to parents of dependent undergraduate students, regardless of financial need. Under the new legislation, the interest rate on new Stafford loans will jump to 6.8% from the current rate of 5.3%, while the rate on new PLUS loans will jump to 8.5% from the current rate of 6.1%. Both rates will be fixed.
Students-Consolidate-Loans-Now-To-Save-Thousands-In-Interest
The average cost of tuition, room and board has climbed at more than double the rate of inflation over the last eight years. Such hikes have also meant skyrocketing student loan debt, which rose more than 70% from $11,400 in 1997 to more than $20,000 in 2005. The good news for recent grads or students who will graduate this spring is that they CAN still lock in a low fixed rate. But there’s not much time. With rate hikes expected to take effect on July 1st of this year, loans must be consolidated by June 30, 2006. “Time is absolutely of the essence-particularly for this year’s graduates,” said Frank Ballmann, student loan expert and an executive vice president at consolidation leader Educational Direct. “They’ll need to act quickly after graduation to get the pre-July 1 rates, which would rise by over 1.5% on July 1 based on today’s interest rates.”
Ballmann offers the following tips for students and their parents:
• Students with $20,000 in student loan debt would pay an extra $300 in interest next year, based on the recent rise in interest rates, if they don’t lock in the current loan consolidation rate.
• The interest rate for consolidation loans can be locked in at a fixed rate for as long as it takes you to repay your loan.
• Consolidation saves money and time-lowering monthly payments with a single fixed interest rate and simplifying the loan repayment process with one monthly payment.
• There are no fees or credit checks to consolidate student loans; it is free and is a right given to borrowers under the federal loan programs, authorized in the Higher Education Act.
