The number of credit card offers posted around campus surprises many students. The offers attract students by assuring them that they don’t need to have a job, or minimum age, and it’s easy to qualify.
Understand that while credit cards afford you the convenience of buying now and paying later, they invariably have strings attached:
|Annual Fees - varying from $40 to $85, even if you don’t charge anything on your account.|
|Interest Rates - as high as 20% (annual percentage rate) for any balance you don’t pay off at the end of the month.|
Monthly payments are required on any outstanding balance. Some cards even require you to pay off the entire balance at the end of each month. Most importantly, the creditors start reporting your payment habits to credit bureaus.
The file maintained on you by these bureaus are accessible by future lenders and employers and could affect their decision to extend credit or employment. In other words, how you pay your credit card bills now will affect whether or not you get a car loan or job in the future. We recommend that you use good judgement when charging your purchases.
Origination and guarantee fees are deducted from Stafford, PLUS, and some other loans. Loan costs can be as much as 6%. Take this into consideration when requesting your loan and anticipating the amount you will receive.
Before taking out loans, estimate how much you will earn when you leave school so you borrow only what you know you will be able to repay. In other words, think twice before taking out loans. The more you borrow, the larger your payments will be.