Credit Cards Or Student Loans?
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.
Federal Education Services is a company that specializes in federal student loan consolidation, Stafford loan origination, PLUS and Graduate PLUS loan origination and as a resource for students with questions regarding educational financing. For any questions regarding this article please contact Federal Education Services. A friendly loan specialist can be reached at (877) 222-4727 or you can find us on the web at http://www.feded.net
Article Source: http://EzineArticles.com/?expert=Matt_Kelly
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