Tips to help college students build their credit reports and continue their education.
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Effective Financial Strategies for Students In College
Jun 22nd
Being a college student brings many privileges and opportunities for young people. But along with these privileges are responsibilities. If you are a student in college or in your freshman year, read on the rest of this article and check out these valuable financial strategies that you can start practicing right now:
On Money Management – Credit Cards for Students
Use your student credit card for schooling purposes. It’s a good thing to have a student credit card so you can build an early credit history for yourself. Nevertheless, uncontrolled use of credit cards can easily lead to bad credit. Thus, a student must be discreet and wise in using a business credit card for buying things or paying bills.
Keep track of your own spending. Managing a credit card for students can be a good training for young people with regards to handling debt. Most credit cards allow cardholders to access their account online so they can closely monitor their personal spending and payment due dates. If you find unfamiliar purchases in your account, call up your issuer immediately to clarify the details in bill before posting your payment.
Create a budget plan. As early as now, make it a habit to plan out your monthly spending. Having a written budget plan will not only help you control your spending, it will also enable you to distribute your allowance effectively.
Keep financial records in a safe place. Always review your monthly credit card bills and other receipts and keep these financial documents in a safe storage. These documents can be indispensable references that you can use in case you may need proofs when filing a complaint.
Protect your personal information. Many college students have been victimized by identity theft and fraud because they failed to protect their personal information. Get to know the tactics used by ID thieves. Be very cautious when providing personal information (Social Security number, credit card number, address, complete name, etc) especially when using Social Networking Communities over the internet such as Facebook, Twitter, My Space, etc.
Be frugal. Frugality is best practiced when you’re young. Find creative ways to save money such as purchasing second-hand text books, comparing prices before purchasing, buying clothes at thrift shops, etc. Do not use your first credit card to pay for something you did not plan to buy in the first place. Recognize the difference between NEEDS and WANTS and be smart enough to say no.
(1 votes, average: 5.00 out of 5)Key Points Concerning Student Credit Cards
May 20th
If you are a young person who owns a student credit card or are planning to apply for one, this article was written just for you. Check out the following
key points about students and their first credit card:
Credit card companies love students. For credit card companies, high school and college students are two important niches. By becoming their first credit card, students are more likely to stay with the same issuer even after their college years.
To attract young people, many issuers offer freebies (shirts, caps, CDs, mugs, gift certificates, etc.) as part of their marketing strategy. However, the New Credit CARD law prohibits credit card companies from distributing flyers or setting up application booths within 1,000 feet of school campuses. The new law aims to discourage young people from signing up for a credit card without doing research or reading the Terms & Conditions.
Understanding credit scores. Yes, a young person can establish his/her credit history by applying for a student credit card. Indeed, this is the only opportunity to get approved for an unsecured credit card without credit history.
However, teenagers need to understand how the FICO scoring system works. For example, the FICO score is calculated based on different categories and one is payment history (35%). In order to build a solid credit foundation, students must be able to consistently keep up with timely credit card payments.
Furthermore, not all issuers of student credit cards offer credit reporting service. To build your personal credit, make sure that your chosen student credit card will report your payments to the major credit bureaus (TransUnion, Equifax, Experian).
Interest rates, fees, terms and conditions. Before signing up your credit card application, check the interest rates, fees, as well as the policies of your chosen issuer. In comparing student credit cards, do not just focus your attention on the APR or the interest rate. Instead, pay attention to the smallest details to make sure that you will be making the right choice.
Since it will be your first credit card, it is recommended to ask for assistance from your parent or guardian or a friend who has good credit history. If there are terms in the Agreement that you do not understand, do your homework or ask for help.
(No Ratings Yet)Things to Consider When Applying for Your First Credit Card
May 18th
Students have the privilege to get approved for an unsecured credit card despite not having credit history. For this reason, financial advisors recommend applying for your credit card while you are a student. Today, let’s discuss some
tips on how to you can find the right credit cards for students:
Credit Card Features – Rates, Fees and Conditions
Check the terms and conditions before submitting your application. Understand how the interest rate is calculated. Keep in mind that credit cards with variable rates are subject to increase depending on the Prime Rate. How much is the penalty fee, the annual fee, balance transfer fees and other finance charges?
Once you submit your credit card application and gets approved, you are subject to abide by the Terms and Conditions of your chosen credit card company. Hence, it is very important to pay attention to the rules before taking action.
On Being A Student Credit Cardholder
While conducting your search, you may find that some credit cards for students offer introductory interest rates and exciting rewards. Young people can easily get attracted to credit card deals especially since it is their first time to apply.
However, before grabbing the offer, check the rates, fees and conditions when the introductory period ends. If you want to get a student credit card with rewards, make sure that you will be able to post your payments on time to avoid high interest rates or expensive penalty charges.
Are You Ready to Use Your First Credit Card?
Owning a credit card is a big responsibility. Yes, you have the responsibility to your credit card issuer to pay your debts in a timely manner. More importantly, a student credit card can be your tool in establishing your personal credit history so that by the time you graduate from college, you have already built a solid credit foundation for yourself.
When used correctly, credit cards for students can bring many benefits. However, when used carelessly, it can lead a person to uncontrolled debt and bad credit. Use your first credit card to prove that you are smart enough to manage your own finances without getting yourself in trouble. Be exercising self-discipline and motivation, you can surely enjoy the advantages of having a credit card.
(No Ratings Yet)Tips on How to Use Student Credit Cards Wisely
Apr 19th
For young people who are starting to build their own credit history, credit cards for students can be the perfect tools for building credit. Nevertheless, achieving a good credit standing all boils down to how the student manages his/her credit card. If you are a student credit card holder, below are some tips written just for you:
Use only one credit card at a time. If you own more than one student credit cards, make sure you don’t use two or more cards within the same month. Incurring charges on more than one card can prove to be risky, especially since most students do not have their own source of income and try to pay off their charges using the money sent by their parents.
Be mature. This is your chance to show that you are a responsible adult. Thus, before using your first credit card for anything, ask yourself these questions:
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Do I really need to make this purchase now?
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Is it really important?
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Can I pay this in full on or before the due date?
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Will I need to ask money from my parents to pay for this?
Limit your credit usage. How much of your borrowing limit you use can make a big difference in your credit rating. Experts recommend not using more than 40% of your available credit. By keeping your purchases minimal and by paying your monthly balance in full, you can avoid the risk of debt build-up and maintain good credit rating.
Submit your payment right away. There’s no need to wait until your due date before you submit your payment. You should make your payments at the earliest time. If you have the cash in your hands, why not submit your payment the same day you made the purchase? This way, you can avoid additional charges such as the interest rate and late penalty fee.
Plan your spending. Never use your credit card for any purchase that you did not plan. If you want to use your credit card to buy your groceries, create a shopping list before going to the supermarket. Stick to the plan you created and fight the temptation to buy things that are not on your list. By doing so, you can avoid purchasing things that are not important or you do not really need.
Keep your credit card in a safe place. You need to be conscious about where you put your credit card whether you are in school, in your dormitory or outside. If you lost or misplaced your card, call up your bank or Issuer immediately to report it. When paying with a credit card, keep an eye on your card and make sure that it never leaves your sight.
(No Ratings Yet)How Students May Clean Up Their Bad Credit
Apr 8th
Sometimes, even when you strive to protect your credit history, you may find that your rating is below what you expected. What if you discovered that you have poor credit? What can you do to regain a good credit standing? Below are practical suggestions on
how to build good credit with credit card for students:
Regularly look into your credit report. Do you regularly check your personal credit report? You should order a copy of your report from all the three major credit bureaus (Equifax, Experian, and TransUnion) at least twice a year to ensure that it contains no errors or incorrect information. You can also take advantage of your privilege to a get a free credit report once a year by visiting AnnualCreditReport.com.
Examine your report for errors. Erroneous credit reporting is a fairly common case. Sometimes creditors may report inaccurate information to the bureaus. Sometimes the credit reporting agencies commit the errors themselves. There are also instances when your record gets mixed up with another person’s credit history. This is why checking your credit report is very important.
Compare all three credit reports. Remember that each report you obtain from the three credit bureaus (Equifax, Experian, and TransUnion) may not be exactly the same as the other. If you find discrepancies with your personal details, payment history, or within any section of your credit file be prepared to find a dispute.
Send a letter of dispute. The Fair Credit Reporting Act gives all consumers the right to dispute credit report errors. If you are a teen who owns a student credit card, do not hesitate to exercise this privilege. The credit bureaus must investigate on the issue as soon as they receive a letter of complaint or dispute from a consumer.
You can find sample credit dispute letters from the internet that you can use as reference in creating your own. In your dispute letter, clearly point out the error that you want to be corrected. You should also send a photocopy of your report (with the items in question clearly marked); as well as photocopies (NEVER ORIGINALS) of receipts or other documents that prove your claims.
Send your letter through registered post mail to the credit reporting agency that issued your report. If you do not get a response after 10 days, send a follow up dispute letter. The investigation can take up to 30 days to complete. After this period, the bureau must inform you about the result of the investigation along with a free and updated copy of your credit report.
(No Ratings Yet)Can My Student Loans Be Really Discharged when I Declare Bankruptcy?
Apr 6th
A lot of people think that bankruptcy can completely solve all their credit problems. After all by filing for bankruptcy, you can easily discharge your debts, and start all over again.
But sadly, this is a misconception. Not everyone can take student loan bankruptcy to retire their debts. The bankruptcy policy reforms impose more stringent criteria on who can be eligible to discharge credit on student loans.
Filing for bankruptcy also takes much time. You need to attend several proceedings in bankruptcy court just to prove that indeed you cannot repay your student loan debt. And this is not a very easy thing to do. Why? Because most courts are becoming more and more reluctant in approving student loans bankruptcy.
To finally clear out wrong notions, allow us to explain the real, hard facts associated with student loan bankruptcy.
Facts about Student Loans Bankruptcy
An individual can only be eligible to discharge student loan debt if the applicant can prove that he/she experiences undue hardship. What does this mean? You can take student loans bankruptcy if you can prove that you belong to any of these criteria:
- you are physically unable to work;
- you have made a conscious effort to repay your debt but it prevented you and your family from maintaining a minimal standard of living
- there is a very small chance for you to find employment within the duration of your loan
Yes, there is a possibility to discharge your student loan debts. That is if you can effectively prove that you are either physically handicapped or that the chances for gainful employment in the future are non-existent.
If you would like to push through with this decision, you will be prompted to file a separate motion in a bankruptcy court. You will be required to prove your hardship before a judge and convince him to approve your claim.
By looking at these criteria and processes, you may now realize that it is extremely tough to get student loan bankruptcy. But there are other ways to eliminate your student loan debts. How?
Options you can Take
- Get a student loan consolidation. Student loan debt consolidation is one of the best ways for a graduate to gradually eliminate bad credit. In this program, the student loan debts and other bills or loan repayments will be consolidated or merged into a single amount. Then, you will need to propose a repayment plan to settle your debts. You will inform your creditors about your debt repayment schedule which can take at most five years to completely retire.
But there are also vital requirements in consolidating student loans. You need to have a stable source of income which can provide you disposable funds. You must also meet the minimum credit requirements for both secured and unsecured debts. But still, through a student loan consolidation, you will be able to gradually reduce your outstanding financial obligation. In the end you can be declared totally free from any forms of debt.
- Consider other credit management options. Some people use student loan forgiveness programs. In this program, you will be required to perform a voluntary service to the community for a specified number of hours. You may also be encouraged to join the military so you can totally eliminate your debts. Other options include forbearance and deferment during tough times, income-contingent repayment plans and other credit busting methods.
We hope that through the things mentioned in this article you can now answer this question: can my student loans really be discharged when I declare bankruptcy?
(No Ratings Yet)Credit Card Terminologies for First Time Cardholders
Mar 19th
Now that you’re ready to apply for your first credit card, you need to spend time considering your choices. One crucial step in searching for the right student credit cards is to read the fine print. But since this will be your first credit card, you may find that some of the terms are quite vague.
First Credit Card Terminologies
This article presents some of the basic credit card terminologies that you need to understand before signing up your application. Familiarizing yourself with these terms can help you in determining which credit card would be your best choice:
Annual Percentage Rate. The APR is the rate of interest applied to your charges expressed in an annual percentage. For example, if your credit card APR is 15%, divide into 12 months and you get 1.25%. That means, an additional 1.25% will be added to your monthly balance if you cannot pay it in full on or before your due date of payment.
Interestingly, some credit card companies impose three kinds of APRs: the first APR applies to new purchases; the second, to balance transfers; and the third APR for cash advances. Make sure that you are clear about the exact rate applicable to each transaction.
Variable Rate. If the interest rate is a Variable or Adjustable one, your current APR can change or increase depending on the Prime Rate. Presently, the New Law does not impose a cap limit on Variable Rates so your initial low APR can still double or triple, depending on your Issuer.
Annual Fee. This is the fee that you must submit on a yearly basis to keep your account active. Some credit cards carry no annual fees but secured credit cards usually do since these cards are especially offered to people with no credit or bad credit history.
Credit limit. The credit limit or credit line defines the maximum amount of charges a cardholder can charge to his/her credit card. The size of the credit limit and the usage can significantly affect a person’s credit score. Ideally, cardholders must keep their credit limit usage minimal (no more than 30% – 40% of available credit) to get a high score.
Due Date. This is the date that you are expected to submit your payment. Failing to submit your payment on your due date means paying late penalty and interest rate charges. Remember that late fees can badly pull down your final credit score.
Balance Transfer. These are charges from another credit card that have been transferred over. Some cardholders may choose to transfer balances to enjoy the lower interest rate or 0% APR that the other credit card offers.
Cash Advance. When you use your credit card to borrow or withdraw cash from an ATM, it is called a cash advance transaction. Keep in mind that cash advance transactions have no grace period so you automatically incur the cash advance APR the moment you make the withdrawal. Aside from the APR, you may also be charged with the cash advance transaction fee.
(No Ratings Yet)Credit Card Advice for First Time Cardholders
Mar 16th
Whether you are a student or not, if this is your first time to handle a credit card, this post was written just for you. Read on the rest of the post to know the available options you have when applying for your first credit card and learn tips on how to use your card for building good credit.
Student Credit Cards for First Time Cardholders
If you are a student, then you can either apply for a student credit card or a secured credit card. It is interesting to note that the New Credit Card Law restricts students who are below 21 years old from getting student credit cards unless they have a co-signer or they can show proof of independent income.
Meanwhile, a secured credit card requires a security deposit so be prepared to submit an upfront payment when you apply. The security deposit may range from a minimum of $200 and above, depending on the credit limit you wish to get. For students, it is best to start with the minimum required deposit as a lower borrowing limit will encourage them to exercise more control over their spending.
Another option is to get a department store card or a gas card. However, most merchants who Issue these cards are more stringent in reporting late payments to the credit bureaus. Also, these cards can be used for payment at selected shops only which can be a great inconvenience.
What about prepaid debit cards? There are debit card issuers that now offer credit reporting but you need to watch out the fees! Although you will not be charged with APR, some debit cards may come with too many fees which can really be a burden. If you do not pick the right one, you may end up paying for more than you bargained for.
Use Your First Credit Card for Building Credit
See to it that your chosen credit card will report your payments to the major credit bureaus. Remember, your primary goal for getting a credit card for students is to build-up your personal credit history. Therefore, it is crucial for you to maintain an impressive performance as a cardholder.
It is not about how much you charge to your credit card each month. What matters most is how consistent you are in paying off your charges. Submitting your payments on time is the key to keeping your credit history in good standing.
Don’t bother to carry over a balance in your credit card from month to month as it will not have a bearing in your credit rating. Paying off your monthly balance in full each month is more likely to impress potential lenders than leaving unpaid charges in your account.
Before signing up for your first credit card, spend time and effort studying the Terms and Conditions of your chosen Issuer. Bear in mind that the only way you can compare credit cards accurately is by checking the fine print. Making the wrong choice today could bring about problems later on so be diligent with your search.
(No Ratings Yet)Building Good Credit with Your First Credit Card
Mar 8th
The importance of building good credit has always been emphasized to consumers. As all things in the market increase in price, building good credit is an essential, now more than ever. Apart from the chance to get easy approval, an impressive credit history can win you better rates and flexible repayment terms from lenders and insurers.
For job seekers, it can make the difference between getting hired or not. Although an employer cannot refuse an applicant based on his/her credit standing alone, it can be a major factor that will give you the edge among your candidates vying for the same position.
This is why students in college are encouraged to start building credit history by getting a student credit card. As soon as you have your first credit card, what are the steps that you can do to ensure that you will be building up good credit history? Check out the following advice:
Check your credit report. It is not uncommon for reports to contain errors or for a mix-up to happen. Someone else’s credit information may damage your personal credit either because of erroneous reporting or because an Identity Thief has been making illegal transactions under the pretence of your identity.
Consumers are entitled to a free credit report once a year from AnnualCreditReport.com. Make sure that you do take a look at your report at least once every 6 months to make sure that it contains accurate information.
Understand how credit scoring works. Understanding how your credit score is calculated can help you become more conscious on taking care of your credit standing. You need to keep in mind that payment history or timeliness of payment comprises 35% of your final score. Hence, even a few late payments on your part can really pull down your rating.
Another important factor is how you use your credit limit. Maximizing your borrowing limit, particularly on your credit card account can send out a negative impression to lenders and insurers. Thus, if you must use your student credit cards for a purchase, keep it minimal (ideally, below 40% of your limit) and try to pay off your full balance before the payment due date.
Some people have the misconception that maintaining a balance on a credit card can help in having up a high credit score. On the contrary, doing so only increases your risk of having bad credit. What’s really more important is paying off your debts completely and on time.
Understand your credit card’s Terms and Conditions. You need to familiarize yourself with the rates and all fees associated with your chosen credit card for students. Have you taken the time to carefully read the fine print before signing up your application? Even if you’ve had that credit card for quite some time, it is still recommended that you review the Terms and Conditions to avoid unpleasant surprises in your bill.
Check your monthly credit card statements. Before making your payments, cardholders are advised to carefully examine their bills to make sure that there are no errors or unauthorized charges in their account. If you find unfamiliar charges, call up your bank or credit card issuer and ask for corrections. Remember that you have the right to dispute errors as stated in the Fair Credit Reporting Act.
(No Ratings Yet)How to Get Out of Student Credit Card Debt
Mar 4th
When used responsibly, student credit cards can be great tools for building solid foundation of credit history. A study conducted by Nellie Mae, a reputed student loan center, reveals that college students graduate with an average of $2,700 to as much $7,000 worth of credit card debt.
If you are presently stuck with credit card debt, don’t panic. Consider the following strategies to eliminate your debts one step at a time.
Strategies to Eliminate Debt on Credit Card for Students
1. Take charge. Even if your credit card debt seems insurmountable, it’s never too late to recover. Take positive action right now and build up your motivation.
2. Know your debts. Before trying to figure out a solution, you need to be aware about the exact status of your debts. Review your billing statements. Order a copy of your credit report so you can check all the accounts you have.
Make sure that there are no unfamiliar charges in each of your accounts. If there are errors, call your Issuer right away to correct the matter. If your creditor refuses to act upon your complaint, send a dispute letter to the credit bureau that issued your report. An investigation will take place within 30 days. Afterwards, you will be notified about the result of the investigation along with an updated copy of your report.
3. Create a doable repayment plan. It is important to create a written plan that you can use as a guide towards debt recovery. Do your best to follow the plan no matter how difficult or inconvenient it may seem.
4. Transfer high rate debt. One way to ease your burden is to get a credit card for students with a low or zero balance transfer rate. Transfer all your outstanding balances from your high rate card. This way, you can pay off your debts without the additional interest rate charge.
Choose a zero rate balance transfer credit card with a sufficient introductory period and reasonable fees. Remember, you’ll need to complete your payments while the zero interest is still applicable. Carefully read the fine print to make sure that the Terms and Conditions are fair.
5. Stop spending. You will surely have a difficult time paying off your debts if you continue using your credit cards for students on new purchases. This is not the time to splurge. If you need to use your card to keep your account from closing out, use it only for a small purchase and pay it back the same day you made the purchase.
6. Cut costs. Find ways to cut back on your monthly bills and personal expenses. For instance, you may consider giving up some subscriptions or switch to a lower plan of cable, internet, etc. Every cent you save, you can put aside to pay off your debts.
7. Seek professional help. Don’t be afraid to seek help from a trusted credit counselling agency. A credit counsellor should be able to give you advice on how to manage your finances more effectively.
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