When Applying Online for a Credit Card Seems Like Fast Cash

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June 18, 2007

When Applying Online for a Credit Card Seems Like Fast Cash

Once you have graduated college, chances are you are going to have a great deal of money to pay off. Loans from the government or other organizations are going to want their money back now that you have used it to get through school. But that is not the only type of debt you may have.

If you owned a student credit card, or any other credit card for that matter, you may not have been paying complete attention to the amount of money you spent on that card (or multiple cards). By paying only the minimum, the balance will continue to go up, getting hit with the finance charges until you suddenly realize you have reached your limit or owe a lot more than you thought.

Some students may have gotten a little overzealous with rewards credit cards, using them to pay for everything in order to get the reward. Normally, that is a decent plan in order to get your rewards faster, but losing track of unbridled spending can come back to kick you in the pants when you suddenly realize your balance is in the thousands instead of something much lower.

The ease at which a student can obtain a credit card may be surprising to some adults considering in the past one has had to have a good credit history before getting offers. These days it is exponentially easier. Credit card companies send out thousands of offers each year to various college students, and if that were not enough, they also use phone soliciting. If a student ignores each of these offers, if he or she should decide to get a credit card, there are numerous sites that allow you to apply online for a credit card. It only takes seconds for someone to do a credit card search, find the right card, enter their information, and get approved.

There are plenty of college students out there who understand how to use a credit card, but there are many others who will assume an instant approval credit card means instant free money. This is completely untrue, and yet some people are still surprised to find that they have to repay all that money in a timely manner or be penalized for it. Even a 0 balance transfer credit card will eventually start charging the card holder.

Another problem is the confusion with a debit card and the college student’s credit card. This can become a big problem is the student is using the debit card and thinking it will act like a credit card. Instead of holding off on paying the money, the debit card removes money right away from the student’s bank account. Constant use of a debit card thinking it is a credit card will mean a fast drain on his or her bank account, and a great deal of problems and bewilderment when suddenly he or she is informed there is nothing left in the account.

It is not that a student credit card or using the internet to apply online for a credit card and get the typical guaranteed approval card is a bad thing. In fact, because a bad credit history or no credit can be extremely damaging to your future prospects, easily obtaining a credit card through online credit card approval can be quite helpful. The trick is understanding how to properly use the credit card(s) you get and managing them accordingly. This means you can keep your credit history in the green instead of getting off on the wrong foot and building bad credit history from the get go. By reading all of the fine print to understand the terms of your specific credit card, whether it is a rewards card or gasoline card, as well as making payments on time and paying off the entire balance each time, you can stay on top of your credit card debt, and in fact, have no debt at all.

The one thing you will need to pay the most attention to is the APR (annual percentage rate). A higher rate will mean higher finance charges on any balance left unpaid on your card. The best way to avoid finance charges, even if you have a very high APR is by keeping your balance as low as possible; preferably at a comfortable 0. Your APR may be variable, meaning it can change, or it may be fixed at one rate. However, even if it is fixed, the credit card company can change it at any time if they wish to another rate. If you make some moves that damage your credit history, they may raise it. There are also fees you may have to deal with, such as if you pay late, or an annual fee, such as if you have an airline miles card.

Your best bet to stay away from credit card debt is to handle your credit card responsibly and remember that a credit card does not mean free money, no matter how easily obtained. Avoid owning more than at least 2 credit cards, because having more will encourage you to spend more, which means debts over more than one credit card that can quickly add up if you are not careful. Try not to go on sudden shopping sprees with your credit card and instead use it only when you need it. Pay your bills on time and pay off the balance in full each time whenever you possibly can. This will keep you from paying any extra. After all, once you get out of college, the last thing you want to worry about is being up to your eyes in debt.