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 Are you feeling inundated with offers? Like most college students your mailbox is filled with solicitations. Card companies desperately want new business because the traditional adult market is saturated. As you know, credit cards make money charging high interest rates, but what you may not know is that companies also make money from the merchant that you use the card at! Typically, merchants are charged between 2.5 to 4.0% which really adds up for card
companies.
The best way to wade through the offers is to go straight to the disclosure box. It tells you annual fees, your interest rate, grace period, penalty fees and more! It's required by law and it looks like this:
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Annual Fee |
None |
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Annual Percentage Rate |
17.9% variable |
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Grace Period |
25 Days |
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Balance Calculation Method |
Average Daily Balance |
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Other Fees |
$15 late payment fee
$15 over the limit fee
2% cash advance fee |
Most of the terms are self-explanatory. What is somewhat tricky is "grace period". The 25 days only applies if you do not have a balance on your account. Basically, that means that if you have a balance, you have to pay interest on new purchases right
away.
In the next few sections, you will learn how to minimize interest expenses, qualify yourself for a lower interest rate card, and avoid common pitfalls students fall
into.
Next, we'll explain what good credit is EXACTLY...
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