What do I need to know when choosing a student credit card?
Picking the right credit card is easier when you know where to look. Start with our student card comparison. But whichever card you choose, be sure to read your card agreement, no matter how small the print size. You’ll learn how your bill is calculated, what happens if you don’t pay on time, and other terms of your account, including the rights you and the credit card issuer have.
To help make sense of it all, here’s some basic account info every student shouldunderstand before getting a credit card.
What’s the APR?
APR stands for Annual Percentage Rate—the interest rate used to figure how much your interest charges are if you don’t pay your monthly statement in full. If you pay your full account balance every month, you won’t have interest charges. If you can’t pay in full, you’ll want a low APR.
When applying for a student credit card, you should understand these APR terms:
- Intro Rate: A low or 0% APR for an introductory time period. After the intro rate expires, your rate increases, often to a standard variable rate.
- Variable Rate: Variable rates are tied to an index like the U.S. prime rate. If your rate is variable, it will increase or decrease as the index goes up or down.
Are there fees?
Lots of student credit cards offer no annual fee. But other types of fees vary from card to card—and they can add up. Here are some typical credit card fees to watch out for:
- Balance transfer fees for using one credit card to pay off the balance on another credit card. The fee is typically a percentage of the balance you transfer.
- Cash advance fees for using your credit card to get cash. Not only is there a fee based on a percentage of your withdrawal, but cash advances usually are charged a different and possibly higher APR.
- Late payment fees if you don’t pay the minimum payment by your due date. And some cards will increase your APR for paying late.
- Foreign currency transaction fees for using your card to make purchases in a foreign country.
- Returned payment fee or returned check fee if there’s a problem collecting on your payment.
What is my minimum payment?
Your minimum payment is the smallest amount you can pay each month to keep your account in good standing. Paying more than the minimum payment due helps you pay down your debt faster and reduces the interest you will pay.
Always know what you’re signing up for
Applying for a student credit card is a big step, but you can stay on top of it and show your financial responsibility by making sure you understand the rates, terms and offer on your application and always practicing smart credit use. Want more credit basics? See Student Credit Cards 101.
Legal Disclaimer: The articles and information provided herein are for informational purposes only and are not intended as a substitute for professional advice. For exact details on how your credit card works, please refer to your credit card agreement.
TIP: View a sample cardmember agreement to understand the various terms and conditions.
