Why Students Shouldn't Apply for Too Many Credit Cards

As a college student, you’ll be offered lots of student credit cards; it just goes with the territory. However, as great as all those student credit card offers are, you need to be careful about which ones you apply for. Here’s what you need to know.

Don’t Just Sign Up for the First Offer You Find

Start by looking at the different offers available on your campus. Then, look into offers online as well. This website has a number of different options available for you for example. Don’t just take the one that offers free tickets to a football game either. Check all the details of the offer and make an intelligent choice.

Check On Fees

You should check on things like application fees, annual fees and any other fees that may exist for the student credit cards that you are considering applying for. You should also find out if there non-usage fees attached to the card and whether they accept students (student credit card offers obviously will, but if you want to apply for a regular card, find out before you apply by calling to ask).

Look at the APR as Well

Look as well at the APR (Annualized Percentage Rate). This is the interest rate you’ll pay for any charges that you don’t pay off immediately when the bill arrives at the end of the month. You should also pay attention to the different types of APR rates.

For example, do they have an introductory rate? This rate will change over time. Is the rate a variable rate? This means that the amount you pay in interest today is not necessarily what you’ll pay tomorrow. It depends on the prime lending rate, which is currently very low, but could change. There also could be different rates depending on whether you took a cash advance or not.

Remember, You Can’t Have Unlimited Credit

Simply applying for every credit card offer you see, while tempting could mean you could lose out on the best offers. After all, if you already have five student credit cards, the odds are less likely that you’ll get approved for a sixth and seventh card.

The banks like to sign up students, however they also want to make sure you’re a good credit risk. Therefore, when they see you have lots of credit already, they’re more likely to deny you another card, even if you have every intention of paying off your bills in full each month.

Your Credit Takes a Hit Each Time You Apply for a Card

Another thing to remember is that while your current status will get you a pretty good deal on credit cards for students, it doesn’t mean that you have a perfect credit score. Your score, just like anyone else’s can fluctuate. Every time you apply for a credit card, whether as a college student or as an adult, it will have an impact on your credit score because your score goes down slightly every time it is checked.

Generally, this isn’t a problem since the loss is usually two or three points. However, apply for 10 credit cards at once and you’ll lose 20-30 points on your credit score, which could have an effect on your ability to get a good student credit card.

Remember, You Still Have to Pay it Back

Finally, as a student, it may seem that the world is your oyster and that it holds limitless potential for you. While there is much truth to that statement, you do have to remember that when you charge something on your credit card, you have to pay the money back. Therefore, you should limit the number of student credit cards you apply for in order to make sure you don’t have too many bills to pay off.

Follow @CreditDonkey or write to Eric Hunt at eric@creditdonkey.com

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