The Top 3 Things to Know About College Debt and Credit Cards

College life in Boston can be rough and expensive.  Not only is the cost of living higher in the big city, Boston is full of things to do in your free time, which also costs money. However, credit card debt has become the new form of college debt, as more and more students depend on their credit cards to make ends meet.  

There are three things that you must know before you go spending on the plastic though.  These three things will help you to eliminate any college debt that you might acquire from using your credit card.  These three things are also important to know if you do decide that you need to use your credit card to make ends meet.

APR, annual percentage rate, is the cost of borrowing money on a credit card.  Many credit cards are being sent out to students and many of them have very large APRs.  To save money on credit card college debt in the long run, you need a card that has a low interest rate, or APR.  There are some cards out there with a zero percent APR, but they are far and few between.  Many cards have high APRs and these are the ones you want to avoid.  Interest is the main kicker when it comes to college debt that was caused by credit cards, because it is very expensive in the long run.

Cards with bonuses are great for those students that do need a credit card to help ends meet.  These cards provide you with cash-back bonuses on your purchases.  These are great because they allow you to make a little of what you spent back, which in turn helps you to pay off your card each month!  Other types of reward cards tend to have an annual fee, but if you pay your bill off each month and don't mind the annual fee then you can receive plane tickets and other rewards for using your card.  Use these cards wisely, because you don't want to end up with more college debt than you're already accumulating in student loans.

Your credit score is very important.  The higher your credit score is, the better chance you will have on getting low interest on all types of loans in life, whether a credit card or a car loan.  The best way to increase your credit score is to avoid college debt and to pay your credit card bill off each month.  This will provide you with a good payment history which will then raise your credit score.

All college students, whether in Boston or elsewhere, are going to come to a point in their life when they are going to have to make a decision on a credit card.  If you find yourself in this situation, be sure to make wise choices and always pay your bill off.

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