Tips for managing credit cards
A credit card lets you buy things and pay for them over time. Using a credit card is a form of borrowing: you have to pay back the money, with interest.
When choosing a credit card, there are many features — and several kinds of cards - to consider: Annual fees, service charges, interest rates, and benefits vary among credit card issuers. As a result, some credit cards that look like a great deal at first glance may lose their appeal once you read the terms and conditions of use and calculate how the fees could affect your available credit. Do your research and find the credit card that’s best suited to you.
Ultimately, you want to use credit responsibly. Your first choice should always be to pay as you go. However, when unexpected costs arise, having a low-interest credit card available is a good backup plan.
Smart credit card tips:
The Credit CARD Protection Act of 2009
The Credit CARD Protection Act of 2009, signed into law by President Obama on Feb. 22, 2010, contains new protections for college students, including a requirement that credit card issuers and universities disclose agreements with respect to the marketing or distribution of credit cards to students. Highlights from this act include:
- A credit card cannot be issued to a person under the age of 21, without a co-signer over 21 years of age, or without proof of means to repay.
- Prohibits banks from providing promotional items, such as pizza coupons, to entice students to take on debt by signing up for their credit cards.
- Requires card companies to give a 45-day notice of any rate increases.
- Mandates that banks provide a reason for participating on college campuses and university-themed events.
- Requires card companies to offer consumers the option of having a fixed credit limit that cannot be exceeded.