Some students who are on their way to college may be in a position where they are looking for a credit card, as there are also some men and women who are returning to college who are also seeking out lines of credit that may help them in their financial life during their college years. However, what these students need to focus on at the current time is not only whether a credit card will be right for their situation but can they handle the responsibilities that come with using a line of credit, what rates are presently available here in the early part of August, and students need to understand the problems that may arise if they do not carefully handle a student credit card.
Currently, students will have to either have a cosigner, like a parent or guardian, before they will be able to acquire a credit card if they are under 21 or students will have to show that they have the income to meet the requirements that will arise when they begin to charge on this particular card. Obviously, there are still types of student credit cards available despite these changes in lending laws resulting from the CARD Act but students will be looking at an average interest rate of around 13% to 20% on these cards if they qualify.
What this means is for students who may be able to get a cosigner or who might have the income that would allow them to qualify for a credit card is that if a balance is carried they will have to pay a higher overall costs thanks to interest payments and charges that may arise. Understandably, many students fall into the trap of only making minimum payments, which is something that many adult cardholders also have trouble with, as these individuals make the mistake of thinking that just because they can meet these minimum payments they are able to afford the debt they have acquired.
This can be a dangerous line of thinking as financial problems that may arise or simply spending an excessive amounts on credit will not only cause problems in the life of the consumer in terms of their ability to repay their debts but students who miss credit card payments may see an increase in their interest rate, could face higher overall charges, and to do damage to their credit score as well. Students also may be in a position where if they borrow loans as a way to finance their college education will be facing a substantial amount of debt upon graduation if these cards and borrowing options are not used carefully.
Some students simply keep a card as a way to pay for the occasional meal or miscellaneous costs, while others may use these cards only to buy books or if an emergency were to arise. Nonetheless, students need to be well aware of what a student credit card entails so that they can be more responsible in their spending and repayment habits as it would be ideal for a student who gets one of these cards to make affordable purchases that can be paid off in total on a monthly basis rather than letting interest rate charges accrue and students end up paying more than may have been necessary.