Credit Card Quick

Five Signs your College Student may be Ready for a Credit Card

Introduction

Your baby is headed to college, and you wonder if it may be time to arm him with a credit card. Because banks are now held to higher standards when it comes to approving college-age adults with credit cards under the CARD legislation, chances are that you will need to co-sign for a credit card for your college-age child. So, the question is: Is it time to help your college-age child obtain his or her first credit card?

Well, that depends. Although you want to be able to help your child begin to establish good credit, you are also putting your credit on the line if you co-sign. With that said, you should carefully examine your college student’s habits and financial maturity. Here’s what to look for:

1. He has a steady job – A steady job is a must if your child expects to pay off his or her monthly expenditures on a credit card. Arming your college-age child with a credit card only for you to pay it off each month teaches him or her little to nothing about responsible spending, so wait until your child actually has steady employment to be able to pay off the bill each month.
2. He has an active checking and savings account – A checking and/or savings account is a fantastic first step in the world of financial responsibility, so before any credit cards are applied for, make sure your child has an open and active checking account and learns the basics of checks and balances.
3. He pays his other bills on time – A great indication of your child’s ability to handle the responsibility of a credit card is whether he or she has bills and pays them on time, without fail.
4. He understands the value of money – Does your child save any money each month? Does your child save up for things he or she wants? Does your child have a clear understanding of living within his or her means?
5. He understands the importance of a strong credit score – Before co-signing for your college student’s first credit card, have a long talk about the importance of a strong credit score, the advantages to having a strong credit score, and the many downsides to a weak credit score.

Tips for First Time Card Holders

Choosing Credit Card

Obtaining your first credit card can be quite exciting, whatever your age. Perhaps you’re young, out on your own for the first time and looking to gain some financial independence. Perhaps you have fought and struggled, against the odds, to build your credit up, after years of denials, and have finally succeeded in securing some plastic. It’s great! Having a credit card  can really be a benefit and a blessing if you use it right. Face it, you probably earned this credit, and you  don’t want to hinder it now!

Here’s a few tips that will help you to avoid credit pitfalls that could lead to financial ruin.

Enticing Offers

They look good; 0% APR offers are intriguing. While these offers might sound enticing, they are merely the bait that reels in the fish. Yes, you can benefit from these offers as a customer, but you will want to read the fine print to find out just how your card works and what kind of hidden fees they are not telling you about on the package. If you don’t read these fine details, you could easily find yourself caught off guard by surprises within your credit card statement a few months down the road.

Budgeting

Sit down and write out, or utilize a spreadsheeet, your income and bills, tracking your expenses and spending. Be sure to calculate in the interest on credit card purchases and know that carrying  a balance will incur more interest over time, causing you to pay more than a purchase might be worth. List your bills in order of priority. While your credit card ill is definitely an important priority and must be paid, your living expenses must come first. if there is little room to wiggle between these expenses, you will need to curb your credit card spending substantially or only use your card for emergencies, if you want to avoid losing the credit you have built up.

Never Look at a Credit Card as “Free Money”

Credit cards are not “free money.” They serve as a temporary replacement for cash, allowing you to pay later and over time, for the purchases you make. If you can not afford it, don’t use it. Many people have gotten in over their heads by seeing credit cards as “free money,” allowing themselves to forget that not only will they be responsible for repayment of the value of the purchases made, but also for fees and interest. Ignoring the debt will not make it go away. it will affect your credit score, and you are liable to wind up with a lot of harassment and financial stress on your hands.

As a first time credit card holder, it is important to take careful steps with your card. Use it wisely to build up your credit and your financial future should be set for bigger and better things.

Your First Credit Card: Terms you Need to Know

Choosing Credit Card

Congratulations! You’re on the road to financial independence and a great credit score with your first credit card!

But before you begin using your first credit card, you’ll need to first make sure you completely understand the terms and conditions of your credit card – and that means understanding the language that credit card companies use when describing these terms and conditions.

A solid understanding of your credit card’s terms and conditions will help you make the best decisions regarding your credit card so that you don’t end up mismanaging your credit and ultimately ruining your credit score.

Credit Card Terms to Know:

• Annual Fee – An annual fee is essentially a fee charged by the credit card company once a year to you for the privilege of using the credit card. Most annual fees range between $20 and $40, although there are plenty of credit card companies out there that charge no annual fee.
• Annual Percentage Rate (APR) – Ann annual percentage rate is the interest rate charged to make purchases. Always pay close attention to you card’s APR to make sure you are receiving the most competitive interest rate possible.
• Credit Line –A credit line is the maximum amount you may charge on your credit card. If you go over this limit, the credit card company will likely hit you with costly over-the-limit fees.
• Due Date – Your due date is the date that your credit card payment is due every month. If you don’t meet this due date, you will likely be charged a late payment fee and even a hike in your APR, so always pay attention to this date and make a point to get the payment in at least a week or so before the due date to avoid any problems.
• Card Member Agreement – A card member agreement details all of the card’s terms and conditions, all of which you agree to every time you make a purchase on your credit card. Never, ever make a credit card purchase if you don’t understand your card member agreement. Contact the credit card company if there is anything in the statement that is not clear.

When is the Right Time for your First Credit Card?

ATM Choosing Credit Card

If you are a young adult looking to venture into the world of credit cards, then you may want to consider both the advantages and disadvantages of having a credit card. More importantly, you should consider whether a credit card is right for you at this point in your life.

You are bound to see credit card companies set up throughout any college campus. Pushing credit cards to college students with little income and loads of college debt may seem like an irresponsible thing to do, but this practice is played out time and time again.

The bottom line is that it is essentially your responsibility – not the credit card company’s – to determine if a credit card is right for you.

For many college students and young adults, money is tight and bills are high. From college tuition to books and related expenses, there is typically not much money left over at the end of any given month. Credit cards at this time may seem like a convenience, but in reality they are far more likely to be abused because of the ease at which young adults can make purchases, even if they don’t have any cash.

A credit card for a young adult may be the perfect way to begin building credit; yet for some, it may also be the time to make irresponsible credit choices that can affect their ability to obtain loans and even jobs in the future.

The decision to apply for a credit card as a young adult may be difficult, as many young adults are more than capable of handling the responsibility of a credit card, while others are not. As an adult, it is up to you to make the decision whether a credit card is right for you and if you are prepared to handle the responsibility of paying another bill each month.

Before applying for a credit card, consider:

• The costs and fees associated with the credit card
• The APR of the credit card
• Your monthly income
• Your monthly obligations and bills

In the end, having a credit card can be a wonderful option allowing you to better manage your money, track spending habbits and build credit. However, these advantages only come to fruition if you take care in money management.

The Importance of Using Credit Responsibly from the Beginning

Credit Card Debt Credit Repair

Instead of the “what if’s” in life, wouldn’t it be great to do things right in the first place?

For young adults, the importance of using credit wisely is vital. Good credit can open up doors for many young adults and allow them to enjoy the benefits of high credit limits and low interest rates. It can allow them to purchase their first car, their first home and even start their first business.

On the other hand, poor credit from credit mistakes made during young adulthood can really limit our choices as we look to purchase those items that carry us through to adulthood, like a home and car.

Making the Right Choices from the Beginning

Many of us obtained our first credit card during our college years when it seemed like credit card companies set up shop around every corner. Many of us were lured into the idea of a credit card, and credit card companies were banking on that.

However, many of us blindly and irresponsibly used credit during this time and therefore paid the price.

For young adults, now is the time to set the standard for our credit, and to make responsible choices that will afford us a strong credit score and a future full of opportunities.

Understand Creditors and What they are Betting on

To truly maintain a great credit rating, you must first understand the purpose of credit cards and why creditors issue them.

Creditors are betting on the fact that the majority of credit card holders will not pay off their card in full every month, as they make their money on the interest that they charge.

Before you make a purchase, consider whether you have the money to pay the bill at the end of the month, or if you are willing to pay the creditor in the form of interest charges.

Always Spend within your Means

For many credit card holders, a credit card is an excuse to spend money that they simply do not have. Do not fall into this trap! Instead, stop and consider your monthly budget before making purchases that are simply not within your budget or that you don’t really need.

Always remember that, in the realm of credit, we don’t have a second chance to make a first impression!

The New Credit Card Bill and how it Aims to Protect Young Consumers

Credit Card Debt News

For many of us, college is the time we received our first credit card. We all remember the credit card companies coming to our college campuses and pushing credit cards with added perks and gifts. And for many more of us, it is also the time we remember first getting in over our heads in credit card debt.

Credit Card Responsibility

Often times, young adults accept credit card offers without being fully prepared to handle the responsibility. Although the majority of the responsibility lies with the young adult accepting the credit card, many credit card companies, in the past, have willingly given credit cards to young adults who were simply unaware of the related fees and expenses, and were certainly unable to repay the debt.

The new credit card bill, recently signed into law by President Obama on May 22, and set to go into effect on July 1, 1020, will protect, in part, young credit card customers.

Protecting Young Customers

The new credit card bill will essentially prohibit creditors from extending credit to young adults under the age of 21 unless they can prove that they have the means with which to pay off the debt. Otherwise, a parent or guardian must sign for the credit card.

This new law will prevent many young adults from obtaining credit, charging purchases and then having no money to pay off the debt. This will certainly apply for many college students who are already bogged down in debt with student loans and college expenses.

Although the credit industry predicts that this bill will cost them nearly $12 billion in lost revenue, many legislators are hailing this bill as a much-needed respite from the current practices of credit card companies; particularly, soaring interest rates, surprise rate hikes and loads of fees.

Other highlights of this bill will limit credit card companies from imposing interest rates hikes unless the customer is over 60 past their due date, and will prohibit credit card companies from automatically changing interest rates – without notice – on customers that pay their bills.