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I've Graduated and Need A Credit Card ! |
Show Me The Plastic - Where's My Credit Card ?
We all know students headed to college or to the job market will use credit cards.
Many in high school already have a credit-card they use for gas, gifts, unplanned emergencies, party items or other general necessities.
We've even heard of school themes developed to help students explore the many pittfalls of credit-card use and the potential impact to their credit history.
That's certainly a unique twist on a school spirit promotion idea... but we all know the importance of our credit score... and what better way to introduce students to one of life's realities.
It's a fact of life. Credit-card offers often take up more of your mailbox that you'd like.
But when you're a new college student or still in college, those offers for 'free' money and gifts may be tempting.
To make sure you're choosing the right card for your needs as well as for your spending habits, you need to learn what these offers can do for you.
Why You Need a Credit Card
While some financial experts will claim that you don't need a card or that you shouldn't have any, this is for most of us... an unrealistic idea.
In order to establish credit as well as your credit rating, you need to show that you can pay your bills on time and not carry large balances on your cards.
Credit-cards can be a good idea if you apply for one to start building your credit history.
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The longer you have a charge card in your financial history, the higher your overall credit rating may be.
How to Choose the Right One
In a perfect world, you would choose your credit-card based on how low the interest rate is. But with many credit card offers, it can be hard to tell what the 'real' interest rate is and what is not.
Often, to lure new cardholders in, they'll tempt you with an offer of a low rate, but then raise it after a few months.
When you're comparing card offers, it is advisable that you check the interest rate as well as the period of time it is effective. This information is usually found on the advertisement or in the cardholder agreement.
You will also want to look for any additional fees that may be charged to use the card. Many no longer add annual fees as they might have in the past, but some do.
Be sure to also check on the fees for late payments and other transactions to be sure they're reasonable or something you can live with.
Additionally, you might want to choose a credit-card based on the perks it offers you - free cash back, airline miles, and other rewards. The more "free" things you can get out of your credit card, the better.
But, the real test of your credit card... Maybe the real test of you... is the way you use it.
In truth, most financial advisors say credit-cards should only be used in emergencies or when you already have the money to pay for the item, you just don't have the cash handy.
When you spend too much on credit, it can look as though you are living beyond your means - and that can negatively affect your credit score or rating.
By choosing the right card, and using it responsibly, you can ensure you're getting a good start on building a solid credit history without paying a high interest rate and other additional fees.
