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With the dawn of the 'cashless' era, student credit cards
have become a fact of college life. Students can no longer do
without a credit card. Many credit card companies set up stalls
within the college campus during the first semester to lure
students. Just like the ordinary card, student credit cards
carry a credit limit, a grace period, an annual fee and overdue
charges.
When applying for a credit card, every student must remember
that he or she is laying the foundation of his creditworthiness.
The financial reputation thus established will influence future
transactions, like an apartment rental, insurance, car loans
etc. Any future cards you acquire will be offered on the basis
of your reliability as ascertained by these records.
Before you apply for a student credit card, check out the
annual fee, the interest charge, the transaction fee and any
other charges levied. Credit terms vary according to the issuer.
Consider whether you will be paying off your dues monthly or
whether you will pay off purchases over time. To protect your
student credit record, take care to use the card properly by:
Keep track of all charges Pay dues monthly Never exceed credit
limit Avoid over-limit fee
If you default and do not pay off your charges, a credit report
statement that contains details of your delinquency will be
issued by a credit-reporting agency. Any legitimate business can
access this credit report in the future. But without your prior
approval, student credit card creditors, employers and insurers
cannot get these reports. Negative information can stay on in
your report for 7 years and bankruptcy can stay till 10 years.
If ever the debt against your student credit card gets out of
control, contact the issuer and work out a modified payment plan
whereby you will be able to pay manageable and reduced amounts.
A majority of students use their student credit cards to
'swipe' almost anything without forethought, and thereby end up
still paying off their credit card debts well into their 30s.
Undoubtedly, student credit cards make life easy for the
cautious student who shops intelligently and manages money
carefully.
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