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Why Credit Cards are Harmful to College Students
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Transcript
College Students & Credit Cards
Why Credit Cards are Harmful to College Students
Let's get to the point. As a college student, you start getting more responsibilities. But there is one which is start getting a credit card for the first time. Most of the student who get their first credit card does not how to use it properly. This situation can lead to missing payments or racking up debt which it can be a serious problem. Not to mention that it might creep back when you try to apply for a mortgage or auto loan in the future.
Introduction
Missing Payment
- You'll usually be charged a late fee. Late fee ranges between $25 to $35 in which will appear on your next statement.
- Your interest rates may rise. APR is often as high as 29.99 percent, which means you’ll pay significantly more in interest on your outstanding balance.
- It may end up on your credit report. A late payment on your bills could stay on your credit report for seven years if your payment is missing more than 30 days.
Point #1
Not Setting a Budget
- You can build up debt that you can not afford.
- Getting stress out.
- Not setting a budget can affect your credit score.
Point # 2
Not Understanding how APR works
- APR (Annual Percentage Rate) is your interest rate stated as a yearly rate. An APR for a loan can include fees you may be charged, like origination fees.
- Not selecting the proper credit card can lead to pay more on interest than your current balance.
- College students who are starting building credit , usually will get higher APR on their first credit card. It's important to choose the lowest one.
Point # 3
The Bottom Line
- Use what you can afford.
- Make sure you make your payments on time.
- Use credit cards wisely and select the one that gives you more benefits.
- Watch out for hiding fees.
- Limit the amount of cards.
- Pay more than the minimum.
- Always have emergency card.
Conclusion
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