Moving out. This is the term often connotated when you turn 18 and go off to college. College equals independence. Mom and dad aren’t around so you could do things you’ve always wanted to. You don’t have to worry about them looking over your shoulder because chances are, you’ll be miles away from them. Your only concern is cash. Since your parents aren’t there on your beck-and-call, you have to earn your own moolah and fast.

Just as how one is entitled to be on his own in college, this is also the perfect time for one to start off his credit history.

Credit cards are often offered to individuals who are heading off to an independent stage of their young lives. Tips on handling a college credit card well:

1. Don’t be overwhelmed on the bonuses you get when choosing a credit card that is appropriate for you. Some issuers include discounts on novelty stores that are of interest to their targeted clients. The catch is their consumer is too excited to what he can get less to notice that he is actually paying more because there is a higher interest rate.
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Credit card companies consider students that are loyal and good customers, as they tend to upgrade the credit cards when the need arises to do so and the students are supposed to keep the credit cards for a longer period. Hence student credit card offers are found in every nook and corner of the college campus, social gatherings, through their emails and even in the book stores. These facts make the availability of credit cards to students within easy reach. Also the fact is that the students do not have a steady source of income making them go for a credit card.

This is to the benefit of the credit card companies as they get more income on late payment dues and penalties, interest for the credit card balance which is not paid, annual fees etc All the above facts make the students the best customers for the credit card issuing companies. For the students, it is of utmost necessity to own at least one credit card, as it is very much needed during the college days.
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With graduate debt averaging over $15,000, the ability to spread the cost of further education using a student credit card is obviously attractive. Adding to their appeal is the fact that these cards are relatively easy to obtain. Unlike many standard credit cards, they are available to people who do not have a regular, minimum income and credit history.

They often come with tempting offers including low rates for an introductory period, shopping discounts and free CDs. Flexing student plastic has the additional benefit of creating a credit history that can be used to support future loan and mortgage applications.

So, with no regular income and credit history, what exactly is the attraction of students for the credit card companies Well, the fact that graduates can expect to earn, on average, $400,000 more over their lifetime than the national average, means that financial institutions are eager to attract this extra earning potential. Banks and credit card providers know that the general public are reluctant to go through the hassle of changing accounts, so by attracting students early in their career, they are likely to stay with them for life. (more…)

You need some more money for college expenses this semester. Do you whip out a credit card to pay for your books, or do you apply for a federal or private loan? Well, consider the options –

With a federal loan, your interest rate will be low around 5% and your payments will be deferred until 6-9 months after graduation.

With a private loan, the interest rate will be slightly higher than with a federal loan but will still be lower than average. In addition, you will only need to make interest payments until after graduation. (more…)

When applying for student loans, it’s so important for prospective college students to calculate their finances as best they can to receive the appropriate funding. From tuition and books to room and board, living expenses and food, students should make sure to secure the funds they actually will need to get them through each semester at college.

By applying for the correct amount, students won’t find themselves in a bind or get themselves into a credit card nightmare.

Way too many college students these days get into big trouble with credit cards. It’s unfortunate that students too inexperienced to know better receive enticing credit card offers in the mail. Usually when a credit card offer looms over a student, it’s like dangling a carrot in front of a rabbit. The student grabs the credit card offer without thinking ahead. Credit cards oftentimes appear to be a quick fix or a type of “free money,” and they then become the remedy students think they need.

Student Loans versus Credit Cards

If anything, it’s the opposite. Like student loans, credit card debt must be paid back. There’s a huge difference though. Student loans usually are taken out with fixed interest rates, depending on the type of loan and a students’ credit rating, amount of loan, repayment terms, etc. (more…)