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Congratulations, college freshmen. Welcome to the world of financial debt.
Credit cards are as much a part of college life as term papers and keggers, but what many students do not realize is that not all credit cards are created equal. Potential customers must consider several factors before selecting their appropriate plastic.
One caveat is the difference between “charge” and “credit” cards. The most famous of all “charge” cards is American Express—arguably the most dangerous card for college students, as AmEx requires its cardholders to pay off the card’s full balance every month. The American Express Blue card is an exception, as it requires that only a percentage of the total balance be paid every month.
New cardholders must sort through the madness once they decide to take on a credit line. Once incoming freshmen send that first check to their college of choice, they are inundated with offers for credit cards. An important acronym usually can be seen through the envelope in bold print: APR, which stands for Annual Percentage Rate. The APR figure is the monthly interest payment that will be tacked onto your debt if you don’t pay off your full damage immediately.
The majority of these spam ads for cards offer “0% APR,” but as you will eventually find with every monetary issue, fine print can kick you in the rear. That zero percent only lasts for a certain period of time, usually one year after they have been issued.
