Getting your first student credit card – Risk factors that you must consider

The best part about growing up and entering your college life is being able to taste financial freedom. Students are pretty vulnerable to the credit card dangers and therefore they are the ones who most often face financially fatal consequences for the mistakes that they commit while taking out their student credit card. Committing credit card mistakes can push you deeper into the high interest unsecured debt hole and adversely affect your credit score. Though the debt relief industry is there to help the students get back on track, it is always better to take precautionary steps that can help you avoid the debt and remain creditworthy throughout your life.

You will often see the crafty credit card providers lure the students with their seemingly best credit card offers in order to get them into their business. This action is nothing but a result of the tough competition that is prevalent within the credit card industry. Despite the efforts of the credit card companies to please the students with gifts, CDs and Tee Shirts, a student must make sure that he stays aware of the offers as this can become a nightmare in the long run. Have a look at the risk factors that you must consider before getting your first student credit card.

* Instant sign up with the first company: The first risk that you may consider is of signing up instantly with the credit card company that you first come across. It is always a wrong decision to choose the offers of a loan or a credit card without taking into account the offers that are provided by the other companies. As you’re a student, you must remain extra watchful since you have a limited source of income. Avoid succumbing to the temptation of signing up with the company that offers you the best gifts for doing the same.

* Not checking the APR of the credit card: A financially responsible person must never forget to check the APR of the loan that he is taking out. The APR is nothing but the Annual Percentage Rate or the interest rate that you have to pay annually. Depending on the interest rates, the monthly payments will also be decided and thus while taking out a student credit card, you must always check the APR and determine whether or not it is according to your financial affordability.

* Getting too many credit cards: Having too many revolving accounts can soon become disadvantageous for a student as he fails to arrange the monthly payments. You will not only face the hassles of arranging payments for the multiple cards, but also hurt your credit score. Being a student, you need to take care of your credit score as your employers will check the score before hiring you. In order to get a good job, make sure you get a single credit card and use it responsibly.

* Getting a card with low credit limit: While a credit card company often starts by offering a low credit limit and then increase the limit as they get the proof of their financial responsibility. Getting a decent credit limit on your first credit card is very important for a student as you may need more amount of available credit for certain emergencies.

Remember that signing up with a student credit card company is an important choice and a wrong decision may cost you dearly in the long run. Don’t rely too much on the debt relief companies as seeking help of them frequently may gradually diminish your score. Take measured and informed financial decisions so that you can stay afloat during these tough economic times.


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