Student Credit Card and Credit Education Blog

The people who advertise credit cards are smart people – and by that, I mean they are very good at using flowery language to disguise some of the hidden fees and penalties that can arise from using their cards. As a responsible credit card user, you have to be able to decode that language so you don’t end up paying excess fees. Here is a look at some of the more common tricks.

You may exceed your card limit - Your credit card will have a limit, but it’s not exactly written in stone. This can be beneficial in an emergency, but many companies want you to go over your limit regardless. The reason? The more you spend on the card,the more you owe, and if you go over your limit, you can now be charged fees and face interest rate hikes. Fun!

Transfer a balance- Not only will you pay a much higher interest rate on balance transfers after the promotional period ends, you will likely be hit with an extra 3% fee for each balance you switch over. Here are some more things to look out for when transferring a balance.

Low minimum payments- Most credit card companies offer low minimum monthly payments (typically around 2%-4% of the balance). The problem with this is it stunts your ability to pay off the full debt and will ultimately cost you more in interest. Here are some more benefits to paying more than the minimum.

0% APR on purchases for six months: This is a clever way to make you used to using your card for everyday purchases so that once the promo period is up, you start paying a much higher interest rate.

ScholarshipPoints code: CARDTRIX

If you have a credit card, it is common knowledge that paying the balance off quickly is desirable and benefits your credit score. However, did you know that thanks to new legislation that was passed in February, paying more than your minimum can actually save you more money than before?

The Credit Card Accountability, Responsibility and Disclosure (CARD) Act of 2009 has a provision that specifically states that any overpayment made on a credit card MUST be used on the balance with the highest APR*. Before this law was passed, a bank could go ahead and apply your extra payment to whatever APR tier they wanted; this would minimize the impact of dedicating more of your income to paying down your debt.

*If you want to learn more about APR, check out our Credit Education Center article on annual percentage rates. (more…)

There are three types of people when it comes to credit card use. The first type abstains from any and all cards. The second type has so many cards their wallet is the size of a cinder block. The third type have a few credit cards, but sometimes wonder if they have too many or too few. So what is the “right” number of credit cards?

For starters, there is no right amount. How many credit cards you should have is related to your ability to manage debt and make payments. If you are a responsible card user, the amount of cards in your wallet is more or less irrelevant.

Second, the amount of credit cards you have will affect your credit score, but not necessarily in the way you think. The amount of cards you have is more informational than anything. If you have a high amount of debt, the credit report will seek the number of cards in your name and interpret that as a basis for your debt. Again, if you have a good rating and low debt, having a high number of cards won’t matter. Check your credit score today!

How many cards you have is based on you. If you have a card, you might have a gas card. You might have a card only for emergencies. You might have a card with sweet rewards benefits that you use for everyday purchases. Make a list of the items in your life for which a credit card will be useful and go from there. Also, if you have credit cards to pay off other credit cards to pay off other credit cards, you might be in need of a debt consultation.

ScholarshipPoints code: HOWMANYCARDS

Being worried about credit is completely normal and honestly, fairly justified in our current economic state. At Student Platinum, we’ve put together a pretty extensive suite of credit education articles to tackle some of the more common questions and provide you, our readers, with as much unbiased and factual information as possible.

Here are a few selections that have gotten popular feedback: (more…)

Online banking is a topic that has not gotten much exposure on the Student Platinum blog, but has become very commonplace in personal finance. When I say online banking, I don’t mean the portals that brick & mortar banks (like Bank of America or Citizens Bank) give you to track your accounts, I mean organizations like ING Direct, Discover Bank and Ally Bank that exist 100% in the electronic world.

If you watch TV regularly, you probably have seen commercials for products like Ally Bank’s online savings account. They usually offer interest rates that are much higher (sometimes more than 4x traditional savings accounts) at the cost of physical convenience. Let’s break down the pros and cons of banking online and see if it’s right for you: (more…)

A lot of blogs (like this one) try to teach you ways to save money. One recommendation that tends to get swept under the rug is calling your credit card company and asking for a reduced interest rate.

The reason this strategy gets overlooked is because it sounds complicated and, frankly, far-fetched. In today’s economy, what kind of business would willingly allow you to let them lose money? To be fair, in the worst patches of the recession, many card companies did in fact turn down consumers who tried the old “I’ll threaten to close my account.”

First,do some research. This should be surprisingly easy. If you have received a number of offers from other companies, you can use that as leverage. Take a look at some of their offers. Don’t go in blindly and ask for zero percent APR. You won’t get it. Aim for a rate slightly lower than your current one. Even a slight reduction can save you a decent chunk of change in the long run.

Second, get your financial house in order. Only very good credit card users will get a lower interest rate. You will need a strong credit rating, with very few or no late pay charges. You can’t have a large balance on your card. You must make more than the minimum monthly payment. The company will look over all of these factors before deciding to lower your rate.

Third, be persistent. If you get rejected one day, that doesn’t mean you will get rejected the next. If the company simply won’t budge on the interest rate, request additional rewards benefits. If THAT doesn’t work, you could begin looking for another cardholder. Visit our credit card comparison page to look over your options.

Image credit: peekblockit on Flickr.

Hello readers! I’m pleased to announce that we have partnered up with Gas Saver Auto Loans to offer a new spectrum of student auto loans. If you are thinking about getting a car or are looking into the process, head over to our Student Auto loan page and take a look.

If you’d like to learn more about fuel efficiency ratings for most cars on the market, check out the Consumer Report’s Guide to Fuel Economy. This is the online version of the magazine Consumer Report you see on the newsstands that tests cars and rates them based on performance, cost, quality and safety.

As far as credit requirements go, Gas Saver has options for pretty much everyone… whether you have very little credit history or a perfect score. If you need wheels, give the above information a look and see if its right for you.