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Irrespective of the age, credit cards have become an integral part of our lives. When the concept of credit card initially came into existence, it was mostly people, with a means to repay the money, applying for them. However, with the passage of time and credit cards becoming an equivalent for "easy money", even children in high schools and colleges started applying for credit cards. Credit card lenders found a good market among the younger crowd who were on the lookout for financial independence and thought that these pieces of plastic can give them that flexibility. Today, banks and other financial institutions issuing credit cards have a specialized segment of cards exclusively designed for teenagers. Before you apply for a student credit card, there are a few aspects that you need to think about.
Most card lenders lure teenagers with the promise of offering rock bottom APR and fees. However, the truth is that this low APR and reduced fees last only till the promotional period comes to an end. Once the introductory offer is finished, the banks will levy the regular APR and charges. Before applying for a credit card it is important to find out the validity of the promotional period, the rates and fees that are associated.
There are lenders who offer fixed annual percentage rate and those who offer variable APR. While it may seem to be tempting to opt for student credit cards offering variable APR, it is the ones with the fixed APR that can prove to be more beneficial in the long run. The variable APR varies based on the fluctuations of the market index. Though there are chances that the rates may go up and down. It is a safe bet to go with cards offering fixed APR.
Even though the banks claim, that the annual fees and the charges on student credit cards are significantly lower than that on the regular cards, in most cases this is not true. It is important to find out the annual fee that you have to pay to possess the card and other overhead charges like the late fees, and financial service charges before you apply for it.