You need more money for college. Do you whip out your credit to pay tuition or do you apply for a federal student loan. It is time to weigh out the options.
• With a federal loan, your interest rate will be low (around 5.125) and your payments will be deferred for 6 months after graduation.
• With a credit card, the interest rate can be as high as 21%. Interest begins accruing almost immediately, and you need to begin paying off the bill the next month.
This is not to say that credit cards do not have a place in your college life. It is good to have one national card (Visa, MasterCard, Discover) on hand to help you build a positive credit history and to provide security in emergencies. When you decide to apply for a card, compare annual fees, interest rates, and introductory offers. And to keep yourself out of debt, try to-
• Pay your balance each month to avoid interest charges
• Pay your bill on time to avoid late charges
• Avoid cash advances, which come with large finance charges and interest that begins accruing immediately.
• Use your credit card once a month to build a good payment history.
• Avoid cards that attempt to charge you an annul fee.
What if you can not get a credit card? There are a few ways to do that.
Ask someone to cosign on a card for you to help build credit history.
Obtain a secure credit card. This is a card that you would deposit funds into and use based on the amount of funds you have available. This is a great way to build credit. Most banks will offer you an unsecured credit card within 6-12 months after opening a secure credit card.
| 
