Sunday, August 2, 2009

Before Applying For A Credit Card Tips

Its been a long time since my last post here. It was really a busy week for me until now. Well, here is the 2nd part of my credit card tips for college students.

For students, you may ask your self this questions before applying for a plastic credit card.

Do I really need a credit card?
If you are able to pay for what you need with cash, check, or a debit card, you might not need a credit card. On the other hand, credit cards are great for emergencies and are useful for purchasing your essentials online.

Can I afford to have a credit card?
If you pay a hefty annual fee just to have a credit card, or regularly carry a balance on your card and pay a high interest rate, you may find yourself spending a lot just to borrow a little. On the other hand, you can make your credit card work for you by choosing a card with no annual fee and by always paying off any monthly balance when you get your bill.

What will I use the credit card for?
You should never finance your college education or your living expenses by using a credit card. Also, using your credit card for things you don’t need and can’t pay cash for is a bad idea. Sure, it’s tempting to whip out the plastic to buy that “something” you’ve always wanted, but if you’re not willing to pay cash for an item, then don’t buy it on credit.

How much credit should I get?
If you are new to credit, or you are a student without a steady income, don’t accept a card with a high credit limit, just because the credit card issuer is willing to give you one. Sure, it’s flattering to be offered a high credit limit but it might tempt you to charge more than you can realistically pay back.

How am I going to pay for this when the bill comes?
If you can pay off your balance every month, you’re making the credit card work for you.
If you think you’re okay because you can pay the minimum payment every month, get ready for a very expensive long haul. Though minimum payment amounts can vary among credit card issuers, one thing is for sure, paying only the minimum will mean you are paying for years after you leave college, even if you stop using the card.

Hope I have given simple and basic tips for you to think of. Till next post.

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Monday, June 29, 2009

Tips For College Students Regarding Credit Card Usage

You’ve probably heard from a lot of credit card companies offering you what seems to be a great credit card deal. While having and using a credit card wisely is a common tool to build a good credit history, falling into a credit card trap can ruin your credit for a long time.

Why should this matter? Credit card companies have been successful in aggressively marketing credit cards to college students. According to a 2005 study published by Nellie Mae, a student loan company:

• An estimated 76 percent of undergraduates carry at least one credit card.
• Fifty-six percent of all undergraduates surveyed for the study reported obtaining their first credit card at the age of 18.
• The average outstanding balance on undergraduate credit cards was $2,169.
• Seventy-nine percent of undergraduate credit card holders regularly carry a balance on their cards, paying interest on those balances which increases the amount that must be repaid to the card company.

It’s no secret that paying off credit card debt can be difficult. The more you owe, the harder it is to get out of debt. And with credit card debt, paying your way out can be very expensive.

Good credit can open doors for things like renting an apartment, getting a loan for a car, or even buying a house. Bad credit can put even the most basic essentials out of reach and make borrowing money more expensive, or in the worst case, impossible. A mistake you make when you are 18 will stay on your credit report until you are 25.

Whether you’re considering your first credit card, or you’ve been around the credit card block, here are some tips you can use to build and maintain strong credit and make a credit card work for you.

Tip # 1: Beware of the hard sell, freebies, and the “easy credit” traps.

You’ve probably heard these come-ons:

• Gotta have it!
Credit card companies love to make you think a credit card is indispensable. Think twice before signing up for a credit card you may not need.

• Have a freebie!
What does that “free” mug or tee-shirt really cost? Once you’ve agreed to the terms set by the credit card company, you may end up paying a lot more for that “freebie” they gave you when you applied for their card.

• Does the card require an annual fee? If so, you will end up owing the credit card company a fee even if you never use the card. Miss a payment or pay late? That will cost you a fee, typically around $34.00.

• Exceed your credit limit? Get ready for another charge. You get the picture. They know how busy students can get, and how easy it is to miss a payment, pay late, or go over your limit. Don’t be enticed by a “freebie” that may cost you much more in the long run. Those freebies may simply not be worth it. You may also check your credit reports to see if you already exceed your limit. Check this post about free credit report without using a credit card. It can help you out.

• If you don’t like it, you can cancel at any time!
Don’t believe it. Many consumers have reported difficulties canceling credit cards they no longer want. Either the customer service representatives were not helpful or they couldn’t cancel the card because they carry a balance they cannot afford to pay off. Many times, those balances were driven up by fees charged on their accounts for late payments, and interest rate hikes.

What often begins as “easy credit” can end up becoming a credit card trap that’s difficult to escape.

More of this great tips and advices here at Free Credit Card Reports blog soon. Feel free to come back or bookmark this blog for future reference.

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