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College credit

Dear Dr. Don,
I am a senior in college and am going to be graduating and getting married in May. I am interested in getting a credit card to pay for things like honeymoon plane tickets and stuff like that. I have never had a credit card before but have had a car loan in my own name that I completely paid off about a year and a half ago. I was wondering what type of credit card I should look for, and if it should include certain things.
Thank you,
Lisa Leverage

Dear Lisa,
Best wishes on your forthcoming wedding and congratulations on the planned completion of your undergraduate degree. Besides being your fiancé's dream girl, you're a marketer's dream come true, too!

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College seniors are pitched a lot of credit offers for car loans and credit cards. Figure out what role you want credit to play in your monthly budget and choose a card that best meets that need. If you don't plan on carrying a balance, then a low annual fee or an affinity/rebate card may do the trick. If you think that you will carry a balance, then your focus should be on the card's annual percentage rate (APR).

Bankrate's Advisers series has an interactive worksheet that will help you decide what card is right for you. Then use Bankrate's Credit Card home page to find and apply for cards that meet your needs.

The payment history on your car loan gives you an advantage over college seniors that don't have a credit history when applying for credit. It would be a good idea to contact the credit bureau(s) to get a copy of your credit report(s) and credit score(s) so you can see how creditors will see you when you apply for a card.

Finally, don't fill out multiple applications. Choose one or two cards that meet your needs and limit your applications to those cards. Every time you apply for credit, it shows up on your credit report and stays on the report for two years. Multiple applications and rejections make you look desperate for credit, and lenders hate to lend to desperate people.

-- Posted: March 10, 2004

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See Also
Credit cards 101
College students: Prepare for credit card deluge
Financial advice glossary
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