Don’t sign up with the first offer that you get in the mail. Shop around. Read the contract carefully to make sure you understand the terms. Note and compare the important features of each card, including the:
- Annual percentage rate (APR): This is the interest that you are charged on any balance that you carry over, or do not pay off, each month. If you pay off your balance in full every month, the APR is not important, but it doesn’t hurt to look for a card with a low or fixed-rate card just in case. If the card comes with a teaser rate – a low or no interest rate for a temporary period of time – don’t forget to check what the interest rate will be once the teaser rate expires.
Apple Federal Credit Union offers the eXtras Student Platinum Visa® credit card that has a low, fixed APR, $1,500 credit limit, no annual or balance transfer fees, and 24/7 fraud monitoring.
- Credit limit: The credit limit is the maximum amount you can borrow at any given point in time. Having a higher credit limit is better for your credit score, but if you are worried you will overspend, it may be a good idea to look for a card with a lower limit.
- Fees: It is standard for creditors to charge a fee for paying late or going over the credit limit. Some cards also charge an annual fee.
- Rewards: Some credit cards offer perks, such as cash back or gift certificates, that come with using the card.
Keep it Simple
One card is all that you need to start building a good credit history. Plus, it’s easier to monitor your spending and pay one bill each month. If you happen to find that you get into trouble with your card by accumulating an outstanding balance, seek help from a family member or consumer counseling agency. A little help can eliminate a huge debt later down the line.
There you have it. The basics to credit card ownership. If are serious about using a credit card wisely and paying on time then you’re ready to find a card that best fits your lifestyle.
Stay tuned for our next posting “How to Choose the Right Credit Card Limit” next week!