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Why Student Loans Are Better Than Credit Cards
Vanessa McHooley
You need some more money for college expenses this semester. Do
you whip out a credit card to pay for your books, or do you apply
for a federal or private loan? Well, consider the options –
With a federal loan, your interest rate will be low (around 5%)
and your payments will be deferred until 6-9 months after
graduation.
With a private loan, the interest rate will be slightly higher
than with a federal loan but will still be lower than average. In
addition, you will only need to make interest payments until
after graduation.
With a credit card, on the other hand, 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.
This article is distributed by NextStudent. At NextStudent, we
believe that getting an education is the best investment you can
make, and we're dedicated to helping you pursue your education
dreams by making college funding as easy as possible. We invite
you to learn more on how Student loans are better than credit
cards at http://www.NextStudent.com.
My goal is to help every student succeed - education is one of
hte most important things a person can have, so I have made it my
personal mission to help every student pay for their education.
Aside from that, I am just a pretty average girl from SD.
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