It was incredibly easy to get that first student credit card.
There was a simple application to fill out online and with just a click of the mouse, you were a newly minted card holder! You had to wait a week or so for the card itself to arrive; but remember how it felt! You finally felt like an adult.
You looked online and learned that the best way for a student to begin establishing a credit history was to get a student credit card.
Then you would just need to make purchases and of course, make your payments on time.
It sounds pretty simple.
Fill out an application; wait a little while, then shop.
Then the statements start coming - and every month you are more apprehensive about opening it than you were the month before.
How did you get yourself into this mess? Let's say that you spend $100 a month on clothes.
You don't have much cash around, but there was a sale going on, so you used your credit card to purchase.
You needed clothes and you have to establish credit after all, so why not do both at once? While this sounds like a good idea, when you think about the cost it doesn't end up sounding quite so tempting.
You spent $100 on clothes, but with your 21% APR, applied monthly it will take you a little more than a year of making the minimum payment to pay for those clothes.
This is all because of how interest rates work - you are basically renting the credit card companies money.
By the time you finish paying it off, those clothes may no longer be in style.
Of course, it could be worse.
Just think how it would be if you'd charged $1,000 for that large screen TV you wanted instead.
You should always keep your APR in mind.
This is the amount of money using your card is going to cost you.
This rate is applied to your outstanding balance each month.
If you happen to have a variable APR, this means that your card company can raise your APR at any time; without notifying you of the change.
That hardly seems fair, you say.
No one warned you - in fact, they did.
All of the terms and conditions were spelled out in the documents you signed; you didn't read it first.
Especially if you have no credit history, or have poor credit, don't expect to get all that great of a deal from your card company at first.
When it comes to credit, being responsible pays off.
You should always make your minimum payment on time and if possible, more than that.
There was a simple application to fill out online and with just a click of the mouse, you were a newly minted card holder! You had to wait a week or so for the card itself to arrive; but remember how it felt! You finally felt like an adult.
You looked online and learned that the best way for a student to begin establishing a credit history was to get a student credit card.
Then you would just need to make purchases and of course, make your payments on time.
It sounds pretty simple.
Fill out an application; wait a little while, then shop.
Then the statements start coming - and every month you are more apprehensive about opening it than you were the month before.
How did you get yourself into this mess? Let's say that you spend $100 a month on clothes.
You don't have much cash around, but there was a sale going on, so you used your credit card to purchase.
You needed clothes and you have to establish credit after all, so why not do both at once? While this sounds like a good idea, when you think about the cost it doesn't end up sounding quite so tempting.
You spent $100 on clothes, but with your 21% APR, applied monthly it will take you a little more than a year of making the minimum payment to pay for those clothes.
This is all because of how interest rates work - you are basically renting the credit card companies money.
By the time you finish paying it off, those clothes may no longer be in style.
Of course, it could be worse.
Just think how it would be if you'd charged $1,000 for that large screen TV you wanted instead.
You should always keep your APR in mind.
This is the amount of money using your card is going to cost you.
This rate is applied to your outstanding balance each month.
If you happen to have a variable APR, this means that your card company can raise your APR at any time; without notifying you of the change.
That hardly seems fair, you say.
No one warned you - in fact, they did.
All of the terms and conditions were spelled out in the documents you signed; you didn't read it first.
Especially if you have no credit history, or have poor credit, don't expect to get all that great of a deal from your card company at first.
When it comes to credit, being responsible pays off.
You should always make your minimum payment on time and if possible, more than that.
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