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| Choosing Credit Card Applications |  Credit terms range among issuers. Think about how you plan to use your card, before shopping for it. Are you going to pay your bills in full each month, or plan to pay off your purchases over time? Take into account the Annual Fee, Finance Charges, balance computation method, and whether or not there is a Grace Period for purchases.
Remember: Some student credit cards do not allow a grace period for the amounts due if you use the Cash Advance or Balance Transfer features, even if they have a Grace Period for buying. It's also very useful to look at the Credit Limit and how widely the card is accepted, as well as the plan's additional services and features. Take into account and compare all terms, including the following, before you choose a student credit card:
Annual Percentage Rate (APR) and Finance Charges
The APR (Annual Percentage Rate) is a measure of the cost of credit, expressed as a yearly rate. The card issuer must also tell you the "periodic rate," which is a rate applied to your prominent balance to figure the Finance Charge for each Billing Cycle. Some student credit cards plans give the possibility to the issuer to change your APR when interest rates or other economic indicators (called indexes) change. The plans can be called "Variable Rate" programs, because the rate change is linked to the indexes' performance. Rate changes raise or lower the Finance Charge on your account. If you're going have a Variable Rate card, the issuer must also give information that discloses to you:
• That the rate may change.
• How the rate is determined, which index is used and what additional amount (the "margin") is added to determine your new rate.
Remember: Most credit card plans give the possibility to the issuer to "reprice" your current APR if the account falls into poor standing or becomes delinquent. Repricing is the act of enlarging the APR.
Annual Fee
Sometimes annual membership or participation fees can be charged by some issuers. Fees sometimes can reach as much as $100, but usually they vary from $25 to $50. As for "Gold" or "Platinum" cards, they sometimes can reach as much as several hundred dollars. The charging of the fees depends on whether or not you employ the credit card.
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