{"id":2168,"date":"2016-09-23T17:03:28","date_gmt":"2016-09-23T17:03:28","guid":{"rendered":"https:\/\/courses.lumenlearning.com\/waymaker-collegesuccess\/?post_type=chapter&#038;p=2168"},"modified":"2020-07-29T23:20:00","modified_gmt":"2020-07-29T23:20:00","slug":"text-credit-card-opportunities","status":"publish","type":"chapter","link":"https:\/\/courses.lumenlearning.com\/waymaker-collegesuccess\/chapter\/text-credit-card-opportunities\/","title":{"raw":"Credit Card Opportunities","rendered":"Credit Card Opportunities"},"content":{"raw":"<div class=\"textbox learning-objectives\">\r\n<h3>Learning Objectives<\/h3>\r\n&nbsp;\r\n<ul>\r\n \t<li style=\"font-weight: 400;\">Describe the opportunities, risks, and rewards of owning a credit card<\/li>\r\n<\/ul>\r\n<\/div>\r\n<img class=\"wp-image-2170 alignright\" src=\"https:\/\/s3-us-west-2.amazonaws.com\/courses-images\/wp-content\/uploads\/sites\/605\/2016\/09\/23165935\/12696032183_0d9622ae98_z.jpg\" alt=\"Close up of corners of four credit cards on a table, fanned to show their logos: 2 Visas and 2 Mastercards\" width=\"350\" height=\"197\" \/>For many college students, who may\u00a0not have a lot of money or even a job at all, owning a credit card may seem out of reach. Without money in an account and assurance that you can pay your monthly credit\u00a0bill, the average student\u00a0may not\u00a0seem very \"credit-worthy.\" Still, it can be important to build a credit history for certain opportunities down the road (such as getting\u00a0a loan to buy a house). You may be surprised to learn that there are plenty of companies that offer special options for younger customers, especially students. The following are some offers to look for:\r\n<ul>\r\n \t<li><strong>Error forgiveness<\/strong>: Since\u00a0you\u00a0may be new to the\u00a0responsibility of owning\u00a0a credit card, it\u2019s good to look for plans with error forgiveness. This may\u00a0include a 0 percent annual percentage rate (APR) for the first six months of a contract or waive\u00a0user penalties if you miss or have\u00a0a late monthly payment for the first time.<\/li>\r\n \t<li><strong>No extra fees<\/strong>: Along with 0 percent APRs for the first six months, some credit cards don\u2019t charge students for using their cards in other countries. This is a nice\u00a0feature for students interested in studying or traveling abroad.<\/li>\r\n \t<li><strong>Rewards for good grades<\/strong>: Some companies offer credit card agreements that reward students for excelling academically. For example, you may\u00a0receive cash back every\u00a0year if you\u00a0maintain a certain grade-point average.<\/li>\r\n \t<li><strong>Effective customer service<\/strong>: Credit card companies that have positive customer service reviews often provide extra support in answering questions from\u00a0new customers. Some companies also have tools for their customers\u2019 online accounts that help them pinpoint their spending and payment habits.[footnote]Gardon, Michael. \"Best Credit Cards for Students in 2016.\" <em>The Simple Dollar<\/em>. 10 Feb 2016. Web 12 Feb 2016.[\/footnote]<\/li>\r\n<\/ul>\r\n<h2>Risks and Rewards\u00a0of Credit<\/h2>\r\nCredit cards can give students new opportunities, but owning\u00a0them is also a big responsibility. Students should consider the advantages\u00a0and disadvantages of credit before choosing the best plan.\r\n<h3>Pros<\/h3>\r\n<ul>\r\n \t<li><strong>Saving money<\/strong>: Credit cards can be\u00a0connected to checking accounts so that companies know where their customers\u2019 money is\u00a0coming from and they have an account to charge interest rates to. The account can help students practice saving money rather than needing to having a lot of cash on hand. This can\u00a0make it easier for students to make large payments for things like tuition and unexpected expenses\u00a0like vehicle maintenance or medical bills.<\/li>\r\n \t<li><strong>Receiving benefits<\/strong>: In addition to cash back for good grades, credit card companies may offer other benefits such as store discounts, gas rewards, and points toward air travel.<\/li>\r\n \t<li><strong>Building credit<\/strong>: If you pay off your monthly credit card every month on time, you will start building credit and have a good credit score early on. Your credit score can be an important factor later on if you decide to open another account or take out a loan. Some employers may even want to see your credit history.<\/li>\r\n<\/ul>\r\n<h3>Cons<\/h3>\r\n<ul>\r\n \t<li><strong>Overspending<\/strong>: If something is out of sight, it may\u00a0be out of mind, and the same can be true of money.\u00a0Sometimes people overspend with credit cards because it\u2019s easy to think that you have more money than you really do.<\/li>\r\n \t<li><strong>Interest<\/strong>: Credit card companies with student deals still typically include some level\u00a0of APR or interest rate. If you don't pay off the entire balance every month, using a credit card can be expensive. Suppose you\u00a0decide to use your\u00a0credit card to pay for\u00a0$1,000 in school supplies and books. Credit card 1 has an APR of 10 percent, and credit card 2 has an APR of 24 percent. If it takes you a year to pay off the\u00a0$1,000, you'd actually\u00a0pay\u00a0a total of $1,055.04 with\u00a0credit card 1 and $1,134.72 with\u00a0Credit Card 2\u2014that's $55 or $135 on top of the original $1,000 you charged. This example highlights the importance of making sure you pay off the balance as soon as possible AND choose a credit card with\u00a0a lower interest rate.<\/li>\r\n \t<li><strong>Debt<\/strong>: Unlike debit cards, credit cards allow users to borrow money that they can\u00a0pay back at a later date. While this can be useful in emergency situations, you may end up charging more than you can afford to pay back right way, and you may find yourself saddled with debt. Carrying a lot of debt can damage your credit history and score.<\/li>\r\n<\/ul>\r\n<h2>Contribute!<\/h2><div style=\"margin-bottom: 8px;\">Did you have an idea for improving this content? We\u2019d love your input.<\/div><a href=\"https:\/\/docs.google.com\/document\/d\/1FCoRmNsIi2ovUCv8P2ynQuC-lNT9re1K6Em7tERwBEY\" target=\"_blank\" style=\"font-size: 10pt; font-weight: 600; color: #077fab; text-decoration: none; border: 2px solid #077fab; border-radius: 7px; padding: 5px 25px; text-align: center; cursor: pointer; line-height: 1.5em;\">Improve this page<\/a><a style=\"margin-left: 16px;\" target=\"_blank\" href=\"https:\/\/docs.google.com\/document\/d\/1vy-T6DtTF-BbMfpVEI7VP_R7w2A4anzYZLXR8Pk4Fu4\">Learn More<\/a>","rendered":"<div class=\"textbox learning-objectives\">\n<h3>Learning Objectives<\/h3>\n<p>&nbsp;<\/p>\n<ul>\n<li style=\"font-weight: 400;\">Describe the opportunities, risks, and rewards of owning a credit card<\/li>\n<\/ul>\n<\/div>\n<p><img loading=\"lazy\" decoding=\"async\" class=\"wp-image-2170 alignright\" src=\"https:\/\/s3-us-west-2.amazonaws.com\/courses-images\/wp-content\/uploads\/sites\/605\/2016\/09\/23165935\/12696032183_0d9622ae98_z.jpg\" alt=\"Close up of corners of four credit cards on a table, fanned to show their logos: 2 Visas and 2 Mastercards\" width=\"350\" height=\"197\" \/>For many college students, who may\u00a0not have a lot of money or even a job at all, owning a credit card may seem out of reach. Without money in an account and assurance that you can pay your monthly credit\u00a0bill, the average student\u00a0may not\u00a0seem very &#8220;credit-worthy.&#8221; Still, it can be important to build a credit history for certain opportunities down the road (such as getting\u00a0a loan to buy a house). You may be surprised to learn that there are plenty of companies that offer special options for younger customers, especially students. The following are some offers to look for:<\/p>\n<ul>\n<li><strong>Error forgiveness<\/strong>: Since\u00a0you\u00a0may be new to the\u00a0responsibility of owning\u00a0a credit card, it\u2019s good to look for plans with error forgiveness. This may\u00a0include a 0 percent annual percentage rate (APR) for the first six months of a contract or waive\u00a0user penalties if you miss or have\u00a0a late monthly payment for the first time.<\/li>\n<li><strong>No extra fees<\/strong>: Along with 0 percent APRs for the first six months, some credit cards don\u2019t charge students for using their cards in other countries. This is a nice\u00a0feature for students interested in studying or traveling abroad.<\/li>\n<li><strong>Rewards for good grades<\/strong>: Some companies offer credit card agreements that reward students for excelling academically. For example, you may\u00a0receive cash back every\u00a0year if you\u00a0maintain a certain grade-point average.<\/li>\n<li><strong>Effective customer service<\/strong>: Credit card companies that have positive customer service reviews often provide extra support in answering questions from\u00a0new customers. Some companies also have tools for their customers\u2019 online accounts that help them pinpoint their spending and payment habits.<a class=\"footnote\" title=\"Gardon, Michael. &quot;Best Credit Cards for Students in 2016.&quot; The Simple Dollar. 10 Feb 2016. Web 12 Feb 2016.\" id=\"return-footnote-2168-1\" href=\"#footnote-2168-1\" aria-label=\"Footnote 1\"><sup class=\"footnote\">[1]<\/sup><\/a><\/li>\n<\/ul>\n<h2>Risks and Rewards\u00a0of Credit<\/h2>\n<p>Credit cards can give students new opportunities, but owning\u00a0them is also a big responsibility. Students should consider the advantages\u00a0and disadvantages of credit before choosing the best plan.<\/p>\n<h3>Pros<\/h3>\n<ul>\n<li><strong>Saving money<\/strong>: Credit cards can be\u00a0connected to checking accounts so that companies know where their customers\u2019 money is\u00a0coming from and they have an account to charge interest rates to. The account can help students practice saving money rather than needing to having a lot of cash on hand. This can\u00a0make it easier for students to make large payments for things like tuition and unexpected expenses\u00a0like vehicle maintenance or medical bills.<\/li>\n<li><strong>Receiving benefits<\/strong>: In addition to cash back for good grades, credit card companies may offer other benefits such as store discounts, gas rewards, and points toward air travel.<\/li>\n<li><strong>Building credit<\/strong>: If you pay off your monthly credit card every month on time, you will start building credit and have a good credit score early on. Your credit score can be an important factor later on if you decide to open another account or take out a loan. Some employers may even want to see your credit history.<\/li>\n<\/ul>\n<h3>Cons<\/h3>\n<ul>\n<li><strong>Overspending<\/strong>: If something is out of sight, it may\u00a0be out of mind, and the same can be true of money.\u00a0Sometimes people overspend with credit cards because it\u2019s easy to think that you have more money than you really do.<\/li>\n<li><strong>Interest<\/strong>: Credit card companies with student deals still typically include some level\u00a0of APR or interest rate. If you don&#8217;t pay off the entire balance every month, using a credit card can be expensive. Suppose you\u00a0decide to use your\u00a0credit card to pay for\u00a0$1,000 in school supplies and books. Credit card 1 has an APR of 10 percent, and credit card 2 has an APR of 24 percent. If it takes you a year to pay off the\u00a0$1,000, you&#8217;d actually\u00a0pay\u00a0a total of $1,055.04 with\u00a0credit card 1 and $1,134.72 with\u00a0Credit Card 2\u2014that&#8217;s $55 or $135 on top of the original $1,000 you charged. This example highlights the importance of making sure you pay off the balance as soon as possible AND choose a credit card with\u00a0a lower interest rate.<\/li>\n<li><strong>Debt<\/strong>: Unlike debit cards, credit cards allow users to borrow money that they can\u00a0pay back at a later date. While this can be useful in emergency situations, you may end up charging more than you can afford to pay back right way, and you may find yourself saddled with debt. Carrying a lot of debt can damage your credit history and score.<\/li>\n<\/ul>\n<h2>Contribute!<\/h2>\n<div style=\"margin-bottom: 8px;\">Did you have an idea for improving this content? We\u2019d love your input.<\/div>\n<p><a href=\"https:\/\/docs.google.com\/document\/d\/1FCoRmNsIi2ovUCv8P2ynQuC-lNT9re1K6Em7tERwBEY\" target=\"_blank\" style=\"font-size: 10pt; font-weight: 600; color: #077fab; text-decoration: none; border: 2px solid #077fab; border-radius: 7px; padding: 5px 25px; text-align: center; cursor: pointer; line-height: 1.5em;\">Improve this page<\/a><a style=\"margin-left: 16px;\" target=\"_blank\" href=\"https:\/\/docs.google.com\/document\/d\/1vy-T6DtTF-BbMfpVEI7VP_R7w2A4anzYZLXR8Pk4Fu4\">Learn More<\/a><\/p>\n\n\t\t\t <section class=\"citations-section\" role=\"contentinfo\">\n\t\t\t <h3>Candela Citations<\/h3>\n\t\t\t\t\t <div>\n\t\t\t\t\t\t <div id=\"citation-list-2168\">\n\t\t\t\t\t\t\t <div class=\"licensing\"><div class=\"license-attribution-dropdown-subheading\">CC licensed content, Original<\/div><ul class=\"citation-list\"><li>College Success. <strong>Authored by<\/strong>: Jolene Carr. <strong>Provided by<\/strong>: Lumen Learning. <strong>License<\/strong>: <em><a target=\"_blank\" rel=\"license\" href=\"https:\/\/creativecommons.org\/licenses\/by\/4.0\/\">CC BY: Attribution<\/a><\/em><\/li><\/ul><div class=\"license-attribution-dropdown-subheading\">CC licensed content, Shared previously<\/div><ul class=\"citation-list\"><li>Image of credit cards. <strong>Authored by<\/strong>: Sean MacEntee. <strong>Located at<\/strong>: <a target=\"_blank\" href=\"https:\/\/flic.kr\/p\/kkUu3B\">https:\/\/flic.kr\/p\/kkUu3B<\/a>. <strong>License<\/strong>: <em><a target=\"_blank\" rel=\"license\" href=\"https:\/\/creativecommons.org\/licenses\/by\/4.0\/\">CC BY: Attribution<\/a><\/em><\/li><\/ul><\/div>\n\t\t\t\t\t\t <\/div>\n\t\t\t\t\t <\/div>\n\t\t\t <\/section><hr class=\"before-footnotes clear\" \/><div class=\"footnotes\"><ol><li id=\"footnote-2168-1\">Gardon, Michael. \"Best Credit Cards for Students in 2016.\" <em>The Simple Dollar<\/em>. 10 Feb 2016. Web 12 Feb 2016. <a href=\"#return-footnote-2168-1\" class=\"return-footnote\" aria-label=\"Return to footnote 1\">&crarr;<\/a><\/li><\/ol><\/div>","protected":false},"author":19,"menu_order":17,"template":"","meta":{"_candela_citation":"[{\"type\":\"original\",\"description\":\"College Success\",\"author\":\"Jolene Carr\",\"organization\":\"Lumen Learning\",\"url\":\"\",\"project\":\"\",\"license\":\"cc-by\",\"license_terms\":\"\"},{\"type\":\"cc\",\"description\":\"Image of credit cards\",\"author\":\"Sean MacEntee\",\"organization\":\"\",\"url\":\"https:\/\/flic.kr\/p\/kkUu3B\",\"project\":\"\",\"license\":\"cc-by\",\"license_terms\":\"\"}]","CANDELA_OUTCOMES_GUID":"ab949e6d-8ebd-4204-b451-9452c2f6dc19, cbf741c7-349a-4f50-b9c1-10cbf2f2847b","pb_show_title":"on","pb_short_title":"","pb_subtitle":"","pb_authors":[],"pb_section_license":""},"chapter-type":[],"contributor":[],"license":[],"class_list":["post-2168","chapter","type-chapter","status-publish","hentry"],"part":135,"_links":{"self":[{"href":"https:\/\/courses.lumenlearning.com\/waymaker-collegesuccess\/wp-json\/pressbooks\/v2\/chapters\/2168","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/courses.lumenlearning.com\/waymaker-collegesuccess\/wp-json\/pressbooks\/v2\/chapters"}],"about":[{"href":"https:\/\/courses.lumenlearning.com\/waymaker-collegesuccess\/wp-json\/wp\/v2\/types\/chapter"}],"author":[{"embeddable":true,"href":"https:\/\/courses.lumenlearning.com\/waymaker-collegesuccess\/wp-json\/wp\/v2\/users\/19"}],"version-history":[{"count":4,"href":"https:\/\/courses.lumenlearning.com\/waymaker-collegesuccess\/wp-json\/pressbooks\/v2\/chapters\/2168\/revisions"}],"predecessor-version":[{"id":3620,"href":"https:\/\/courses.lumenlearning.com\/waymaker-collegesuccess\/wp-json\/pressbooks\/v2\/chapters\/2168\/revisions\/3620"}],"part":[{"href":"https:\/\/courses.lumenlearning.com\/waymaker-collegesuccess\/wp-json\/pressbooks\/v2\/parts\/135"}],"metadata":[{"href":"https:\/\/courses.lumenlearning.com\/waymaker-collegesuccess\/wp-json\/pressbooks\/v2\/chapters\/2168\/metadata\/"}],"wp:attachment":[{"href":"https:\/\/courses.lumenlearning.com\/waymaker-collegesuccess\/wp-json\/wp\/v2\/media?parent=2168"}],"wp:term":[{"taxonomy":"chapter-type","embeddable":true,"href":"https:\/\/courses.lumenlearning.com\/waymaker-collegesuccess\/wp-json\/pressbooks\/v2\/chapter-type?post=2168"},{"taxonomy":"contributor","embeddable":true,"href":"https:\/\/courses.lumenlearning.com\/waymaker-collegesuccess\/wp-json\/wp\/v2\/contributor?post=2168"},{"taxonomy":"license","embeddable":true,"href":"https:\/\/courses.lumenlearning.com\/waymaker-collegesuccess\/wp-json\/wp\/v2\/license?post=2168"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}