To find the perfect student credit card to fit your needs, ask yourself some key questions:
1. What is the APR (Annual Percentage Rate) for the card? The majority of student credit cards will come with an introductory rate of 0% that typically expires after 6 months. The best practice is to pay off your card in full every month, but this may not happen. If it's likely that you'll miss some of your payments, you'll want a card with the lowest APR possible. Interest rates can vary as much as 10%, which will be a big deal if you end up missing any payments, so search for the lowest interest rate you can find.
2. Is there an introductory offer? Some cards will offer 0% interest on purchases made, and some for balance transfers, and some will give you 0% interest for both. If you hold a balance on a high interest card now, you'll want to transfer that balance to a 0% card to save yourself some cash. If you don't plan on transferring a balance, but making purchases with the card, then you should get a card that has 0% for purchases. Select the card that best fits your individual financial needs.
3. Does the card come with other benefits? Many cards will go even further and give cash back or reward points as an additional bonus. These rewards can accumulate to big bucks over the long haul. Choose the card that give the rewards that you're interested in.
4. Is the APR a fixed rate or a variable rate? A lot of cards come with a variable rate APR, which means the specfic APR will change in relation to a financial index, like the FED interest rate. The rate will change as the economic indicator changes. A fixed rate stays the same no matter what happens.
5. What are the penalties? What are the fees for missing a payment or going over your credit limit on the card? Read the Terms and Conditions of each card carefully and make sure you know the answer to this question.
6. What is the default rate and what triggers it? If you miss a payment or make a late payment, your lender may be able to change your APR to a higher rate. These rates are often very high, and can even climb above 30%. Your default rate may even be triggered if you miss a payment on a different credit card. Read the terms and conditions to find out what the rules are if you miss a payment.
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