What I've Learned About Credit

Anne is a soon-to-be freshman in college. She, like all of the other students, is getting bombarded with credit application opportunities. She was warned to just say no to a credit card, but she's having second thoughts. She's found one that she's interested in, but is unsure if she would like to go for it or not. Anne decides to do some research on the card.

The card she's thinking about applying for has a rewards program for all members, this is what mainly draws her in. She decides, though, to pay more attention to fees, charges and rates. She finds that there is a low late fee; meaning that if she is late on a payment, she wouldn't have that much of fee for being late. However, she doesn't like the fee that she would be charge for just using the card-or the annual fee. She finds that the Annual Percentage Rate for her desired card was also high, meaning she would have a high percentage fee on her charges.

Anne is not happy to find that the finance charge, or interest, on the card was sky high. While she is upset with some of the information she finds, she's happy to see that the interest rate is fixed; meaning that it will be the same all the time. Although she likes the introductory rate-the low rate that the company is trying to pull her in with that will get higher after the introductory period-she knows that that's not what she should be paying major attention to.

The card company offers zero liability; so if her card is ever lost or stolen, she wont have as great amount to worry over. They also offer balance transferring-or the ability to pay off debt with credit from another card-but, Anne has no intentions to use this. She figures it could help, if she ever needs it. She can also withdraw cash using her card, also known as cash advance. There's also a decent line of credit, or set amount of credit to use, available that is far over what she would use her card for.

In the end, Anne decides to go against getting a credit card. She sees no need to have one while in college, just like she was told. She still likes some of what the company was offering, but she knows that most of it isn't the best either. Anne is happy with her decision, and will consider maybe going for an efficient credit card once she's out of college and can actually afford it and make wise decisions.