Student Credit Card and Credit Education Blog

If you traveled internationally between February 1, 1996 and November 8, 2006 and used a credit card, a recent court case was settled which can award you some additional money. What happened was that a few consumers realized that they were being charged foreign exchange fees from 1 percent to 3 percent, but were not told of this. This was being done not only for purchases but also for ATM transactions. Pretty sneaky Visa, Mastercard, and Diner’s Club, who of course all denied they were doing this.

What is the settlement amount? If you’ve spent under $2,500, you’ll get $25. If you’ve spent more than that, you can be awarded between one and three percent of your spend. You’ll have to answer some questions before they’ll approve you for the latter.

To apply and for more info, visit www.ccfsettlement.com.

Outside of online shopping, studies have shown that the highest rate of credit card thievery is from using it to charge meals at restaurants. This issue may soon change, with the recent step to charge your dinner at the table you’re sitting at. A Ruth’s Chris Steakhouse in Texas is currently testing this feature through the use of a wireless payment processing unit, created by Verifone. The goal is to both quicken patrons’ checkout as well as greatly lower the chances that a card number will be taken by a dishonest employee. Read more about this new technology and fraud prevention system in their press release.

Haven’t figured out what your credit score is? Well, even if you did check it today, you’d find that by the end of 2008, it may be very different. This is because the Fair Issac Corporation (who develops the FICO scores) is working to get Americans closer to more legitimate predictions of how they will handle their credit, be it a credit card or loan.

FICO is predicting that the new scoring system will assist lenders with reducing loan default rates on between 5 and 15 percent. On the bright side, FICO 08 should go easier on consumers who occasionally miss a payment while coming down harder on those who repeatedly do not maintain their accounts. For example, someone will score better if they miss only one obligation, while accurately staying current with three others. However, those with a number of problematic accounts may have their credit score drop.

From my perspective, this is an excellent step in the right direction. The closer the FICO score can predict how people are going to pay, the fewer defaulted loans there will be. This ultimately wastes lenders’ money as it is a loan that will never be paid back – it’s just like throwing money away, which no one likes to do.

Found at Walmart. It’s insane. I’d love to know how many bottles they gave away. At least, you can wear a Citibank T-shirt more than once. (Image/story from The Consumerist)

Interested in winning a cool 10 grand? Our parent company, Student Loan Network, is celebrating 10 years in business and is offering $10,000 to one lucky student, who attends college or grad school in 2008. This scholarship is very simple to apply for and shouldn’t take you more than a minute.

Click To Play

So, what are you waiting for? Get going and apply!. The deadline is Feb 29, 2008.

P.S. Feel free to pass this around to your friends! The more people you refer, the more entries you earn!

Student credit card offers seem to be everywhere, especially if you’re on a college campus. Some credit card companies actually target campuses; setting up little booths and giving away free stuff in exchange for your signature on the dotted line of the credit card application. While some people will tell you to steer clear of all credit cards, all the time- the fact is, you can have a credit card and make it work for you instead of against you.

The trick is to choose a credit card with the best interest rate you can get; and to select a card with a rewards program that will actually benefit you over the long term. Be careful of rewards programs that sound really good- but actually end up costing you more for the “reward” than the reward is worth!

With hundreds (if not thousands!) of credit cards to choose from, and many of them targeted directly to the college-age group, how can you choose a card that benefits you rather than helping you major in credit card debt?

Is a Rewards Program Right for You?

Many student credit cards offer rewards programs. Typical offers might include airline miles, cashback, discounts or free merchandise based on your card use. Some rewards programs don’t really reward the card user at all; and in fact, you may end up paying more for the program than you would for a credit card without the reward program! Confusing, I know.

As a student, if you find yourself flying home two or three times each year- a credit card with a frequent flier program of some type might be beneficial to you, especially if you can build up your miles and then redeem them for free flights. Just keep an eye on cards that offer these rewards in exchange for a high annual fee- often times, you pay several years of annual fees before you would earn a free flight in miles- and you end up paying more for the flight than if you just purchased it yourself.

What Will You Use the Card For?

Hopefully your goal for having a credit card is to improve or build your credit score. Often, as college students, you’re given the first opportunity to establish your credit history. Be careful not to blow it by racking up high credit card bills that you can’t pay, as that’s the quickest way into a downward debt spiral that will haunt you well after you have graduated college.

If you plan to use the credit card for one or two small purchases each month (and then to pay them off in full when the statement comes!) you probably don’t need a card with any extra bells and whistles and a rewards program is not likely to be all that rewarding for you. If the card offers a rewards program without an annual fee; it doesn’t hurt to get one but keep in mind you may never qualify for much in terms of “rewards” as long as you are making small purchases and paying them off immediately. What you will receive though, is a stellar credit rating that will be your best friend once you’ve graduated college and need to get higher priced items- like a home, new vehicle, or sadly- even when you apply for employment. Many employers use your credit rating as a way to determine your worthiness on the job, also!

While there is no need to be afraid of credit cards, or to avoid them all together- it is very important that you use a credit card to your advantage by selecting one with the lowest rates that you qualify for, and then using it responsibly to avoid a degree in credit card debt! Having a credit card handy for emergencies or to establish your credit is a benefit that is well worth the effort.

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Debbie Dragon writes about responsible use and selection of student credit cards for CreditorWeb.com.

There is a camp of people in the United States who think credit cards are evil. They think spending money that you don’t have on hand is an inappropriate financial practice and cash/checks should be strictly used at all times.  This keeps you away from any credit card debt, high-interest rates, and bill collectors knocking on your door. Thank you, duly noted.

I’d like to disagree, you honor. Despite the above, there are a number of reasons why I think everyone should have a credit card. Not only because I write for a credit card website, but there are a number of legitimate reasons to pack at least one piece of plastic in your wallet.

• Easy way to build credit – When you buy a car, house, TV, computer, furniture, etc. and either take out a loan or utilize the “No Payments until 2009″ option, you need to have a decent credit score to get the best rate. Using a credit card and making your payments is the simplest and quickest way to do this.
• Emergencies – You own an apartment and the water heater breaks in the dead of winter. If you don’t have the cash on hand, then using your card allows you to avoid freezing to death.
• Shop online – It’s really the easiest to use Amazon or Overstock. Sure, a few sites take Paypal (which connects with your bank account), but all sites allow you to use your Visa.
• Make money! – If you are good at paying your bill, you can earn cash back or frequent flyer miles with your card, so it’s actually an additional (yet small) form of income. Also, if you’re in real good financial shape and have a 0% APR card, you can use a free balance transfer and deposit your entire credit line into a savings account. You’ll enjoy a years worth of interest in your pocket!

So, you may know all these and most likely you either have a card or plan on getting one soon. But, for those who are wary and don’t understand the benefits,  the above should make it clear why you should participate.

Following my last post, where I discussed different cards new grads can apply for, there’s a part of doing so  that you should most certainly be wary of. And I’m not talking about six figure credit limits.

Every time you apply for a new card, your credit score is looked at by the card’s bank. They need to do this to see how it fares with regards to the requirements of the card your applying for. And everytime they check your credit, your credit score takes a small, temporary hit. Therefore, you should be careful of how many cards you apply for. Unlike shoes or pairs of jeans, you don’t get “refunded” for the dips in your credit score even if you are rejected for a card. It’s not worth applying for 10 cards at one time, as your credit will be in total disarray. This can cause future problems if you need your credit score for any upcoming purchases, including potential emergencies.

Your best bet is to choose one card, which makes sense for both your credit and your goals.  Give that one a shot – you can usually find out your acceptance fairly quickly. If you get it, congrats! If not, find another one and send over a completed application.

My personal bank is USAA (United Services Automobile Association), odd name but a huge bank with tons of services. It’s where I do my banking, insurance, loans and have a credit card. They are very good but only available to current and former members of the armed services. If you have somebody in your family that is a current or former military service member you should check to see if you can get an account there. Once you’re in, you’re in for life: http://www.usaa.com

Anyway now on to my post. They have listed on their site a credit card offer decoder which I thought was nice of them considering they offer credit cards. I’ve posted the contents of the decoder here for you all:

Congratulations! You’re pre-approved to apply! : That’s right. You’re not pre-approved for the card, just for the privilege of asking for one.

19% APR!: This is the interest you’ll pay on stuff you buy. But look out. That credit card could have lots of different interest rates — one for purchases, another for cash advances, a third for balance transfers, and so forth. It’s up to you to find the details in the terms-and-conditions section of the offer.

We have the right to change the rates, fees, and terms at any time, for any reason. (A): Sometimes rates change when you’ve applied for additional cards from other companies. Or, when something nasty shows up on your credit report, such as failure to make payments to another creditor. So even if you’ve been flawless with this card, you could get charged a default rate (inevitably higher) for something you did with another card.

We have the right to change the rates, fees, and terms at any time, for any reason (B): If you’re late on a payment or two, your rate could take off like a bottle rocket. And you can bet the credit card company will be slower to lower your rate than raise it.

Don’t worry about going over your credit limit: Think credit card companies are doing you a favor by letting you charge more than they said you could? Think again. Most charge an over-the-limit fee even though they let you go over the credit limit. And, they might raise your interest rate, again.

We are pleased to offer you 0% fixed APR on purchases (until July 2008): Large print might make you think the 0% rate applies to your balance transfer. But it’s only for purchases. And not for long. After the introductory period ends, you’ll start paying a much higher interest rate — 19% in this example.

Transfer a balance today!: Not only will you pay 19% on balance transfers after the period ends, you may also get hit with an extra 3% fee for each balance you switch over.

Low minimum payments: Most credit card companies offer low minimum monthly payments (usually only about 2%-4% of the balance). That sounds pretty good until you realize that the less you pay, the longer it will take to get rid of your debt, and the more you’ll pay in interest.

Source: USAA Bank Website