||Ask Dr. Don
College and credit
Dear Dr. Don,
What do you think is the best credit card for me to get?
I am currently a student in my last semester looking for a card
to float me through the end of this semester. I am willing to make
the minimum payment each month and then begin to pay off the balance
when I am out of school and working.
I'd rather see you take out a student loan then to finance
your college expenses with credit card debt. Your ability to take
out a student loan after the semester is under way and you've paid
your tuition may be limited. Talk to the nice folks at your school's
financial aid office to see what's available.
Paying 4.06 percent on a Direct Student Loan with
a 10-year repayment plan and deferment options if you go back to
school or have a period of unemployment is a lot better than paying
14 percent to 20 percent on a credit card issued in an on-campus
promotion. A Direct Student Loan doesn't have prepayment penalties
and you could pay it off as rapidly as you would pay down a credit
If that won't work for you, then you can shop
for credit card rates on Bankrate. There is even a special category
for student cards. Credit card companies use your credit history
to estimate the risk they face in extending you credit. They'll
review your credit report and get a credit score based on that report
to help decide both the credit line and interest rate on your account.
Applying to a lot of different companies actually hurts you in getting
approved because the applications show up on your credit report
and stay there for two years. Limit your credit applications to
one or two firms.
You may not have a credit history and will be
looking to build one through this card. If that's the case, a student
card is likely to be your best bet. That's because the card is targeted
to and priced for students with a limited credit history. Get a
copy of your credit report and credit score to see where you stand.
Bankrate provides the contact
information for the three major credit bureaus. While you're
at it, check out "How
do I find a better credit card?" on Bankrate's credit card
channel for more information.
-- Posted: Feb. 12, 2003