| Offers for a credit card for students appear everywhere. Magazines, through the post, charity handouts, newspapers...get the drift. But are any of these offers good for you? Depending on your habits (do you pay off each month, never pay off, or sometimes - if you can get to the bank in time) a different credit card for students will be suitable for your needs. Before you accept and fill out the application forms, shop around to get the best deal. Credit Card Terms A credit card is a form of borrowing that often involves charges. Credit terms and conditions will affect whether your pay through the nose, so it's wise to compare terms and fees before you agree to open a credit or charge card account. We have pulled together some important terms to consider, all of which should be disclosed in all credit card applications and advertising: - Annual Percentage Rate
- The APR is a measure of the cost of credit, expressed as a yearly rate. It also must be disclosed before you become obligated on the account and on your account statements.
- Periodic Rate
- The rate applied to your outstanding balance to calculate the charge for that billing period
- Free Period
- Also called a "grace period," a free period lets you avoid finance charges by paying your balance in full before the due date. Knowing whether a card gives you a free period is especially important if you plan to pay your account in full each month. Without a free period, the card issuer may impose a finance charge from the date you use your card or from the date each transaction is posted to your account.
- Annual Fees
- Most issuers charge an annual membership fee, although many cards now waive this if you spend above a stated threshold.
- Transaction charges
- A card may include other costs. Some issuers charge a fee if you use the card to get a cash advance, make a late payment, or exceed your credit limit. Some charge a monthly fee whether or not you use the card.
If you don't understand how your balance is calculated, ask your card issuer. An explanation must also appear on your billing statements. Other Costs and Features Credit terms vary among issuers. When shopping for a card, think about how you plan to use it. If you expect to pay your bills in full each month, the annual fee and other charges may be more important than the periodic rate and the APR, if there is a grace period for purchases. However, if you use the cash advance feature, many cards do not permit a grace period for the amounts due - even if they have a grace period for purchases. So, it may still be wise to consider the APR and balance computation method. Also, if you plan to pay for purchases over time, the APR and the balance computation method are definitely major considerations. You'll probably also want to consider if the credit limit is high enough, how widely the card is accepted, and the plan's services and features. For example, you may be interested in "affinity cards" - all-purpose credit cards sponsored by professional organizations, college alumni associations and some members of the travel industry. An affinity card issuer often donates a portion of the annual fees or charges to the sponsoring organization, or qualifies you for free travel or other bonuses. Receiving a Credit Card The law prohibits issuers from sending you a card you didn't ask for. However, an issuer can send you a renewal or substitute card without your request. Issuers also may send you an application or a solicitation, or ask you by phone if you want a card - and, if you say yes, they may send you one.
Please also remember to sign this card as soon as you receive it to prevent fraudulent use of the card. Cardholder Protections The law protects your use of credit cards. Prompt Credit for Payment : An issuer must credit your account the day payment is received. The exceptions are if the payment is not made according to the creditor's requirements, or the delay in crediting your account won't result in a charge. To help avoid finance charges, follow the issuer's instructions. Payments sent to the wrong address could delay crediting your account for up to five days. If you misplace your payment envelope, look for the payment address on your billing statement or call the issuer. Refunds of Credit Balances : When you make a return or pay more than the total balance at present, you can keep the credit on your account or write your issuer for a refund - if it's more than a dollar. A refund must be issued within seven business days of receiving your request. If a credit stays on your account for more than six months, the issuer must make a good faith effort to send you a refund. Errors on Your Bill : Issuers must follow rules for promptly correcting billing errors. You'll get a statement outlining these rules when you open an account and at least once a year. In fact, many issuers include a summary of these rights on your bills. If you find a mistake on your bill, you can dispute the charge and withhold payment on that amount while the charge is being investigated. The error might be a charge for the wrong amount, for something you didn't accept, or for an item that wasn't delivered as agreed. Of course, you still have to pay any part of the bill that's not in dispute, including finance and other charges. If you decide to dispute a charge: - Call the card issuer immediately to register the disputed charge.
- Write to the creditor at the address indicated on your statement for "billing inquiries". Include your name, address, account number, and a description of the error.
- Send your letter soon. As a general rule, it must reach the creditor within 60 days after the first bill containing the error was mailed to you.
The creditor must acknowledge your complaint in writing within 30 days of receipt, unless the problem has been resolved. At the latest, the dispute must be resolved within two billing cycles, but not more than 90 days. Unauthorized Charges : If your card is used without your permission, you can be held responsible for up to £50 per card. If you report the loss before the card is used, you can't be held responsible for any unauthorized charges. If a thief uses your card before you report it missing, the most you'll owe for unauthorized charges is £50 To minimize your liability, report the loss as soon as possible. Some issuers have 24-hour free telephone numbers to accept emergency information. It's a good idea to follow-up with a letter to the issuer - include your account number, the date you noticed your card missing, and the date you reported the loss. |