Student Credit Cards & Interest Rates

Even for adults, trying to decipher the basics of interest rates can be incredible. However, it’s especially important for individuals getting student credit cards to understand exactly what they may end up paying in the long run, so they can make smarter choices.

Interest rates vary considerably with credit card offers, so it’s important for students to read the fine print. Generally, interest rates range from between around 7% to as much as 30.25%. On average, most student credit cards will begin with a low interest rate, sometimes as low as 0%.

Even though low introductory interest rates may be appealing initially, after the introductory period ends (it usually lasts about six months) the interest rate may skyrocket to between 16 to 18%. In some cases, a consistent interest rate may be a better choice for students.

Generally, the best student credit cards have a normal interest rate of around 15%, according to The Truth About Credit. Students or their parents should select cards with rates at this level or lower; otherwise, the student is paying too much for their credit card privileges.Scary Facts About Student Credit CardsOne of the biggest problems with student credit cards is that young people do not realize how quickly debt can accumulate and how difficult it can be to get rid of it. Using a credit calculator at, a student could learn that by paying a minimum monthly payment of $25 towards a $1000 with an 18% interest rate he or she would end up spending $1115.41 just on interest at the end of 153 months, which is how long it would take to pay off that balance IF no other purchases were made on the card.

That fact alone should make students carefully consider their desire to have a credit card, especially if they suspect they may not be able to save the card only for emergencies. After all, student credit cards can be useful at times, but if they are used irresponsibly they can do more harm than good.If you are interested in learning more about student credit cards and their dangers, then you may want to read some of our other articles, such as “Student Credit” and “Consolidate Credit Cards

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