If you have ever wandered around a college campus near the beginning of the school year, you may have noticed a large number of student credit card booths posted up in various places. Many large financial institutions offer what are known as “student credit cards” to young adults who are attending college. These special credit cards allow students to build up credit without running a large risk of overspending.
It can often be difficult to open up a new credit card account if you have no credit to begin with. Student accounts, however, are targeted toward those who have never before had the chance to build up credit. Often times, a low spending limit is placed on the account owner, so that he or she cannot buy more than can be feasibly paid off on time. Those who exceed their credit limits will face penalties in the form of fees.
Student credit cards also often come with high APR rates, which will affect those who do not pay off their bills in full at the time they are due. Typically, student APR rates start at around 16% and may be higher, depending on the card you select. You may be able to lower your APR after a few years of building good credit.
These low credit limits and high annual interest rates are in place in order to encourage account owners to be responsible in their spending and to pay their debts in a timely fashion. If you fail to do so, you will face high fees and interest payments that can be financially devastating.
If you have accrued debts that are too high for you to handle, then you may want to consider filing for bankruptcy. The Birmingham bankruptcy lawyers of [firm-name] can help you assess your situation and determine the best course of action. To learn more, contact our offices today by dialing [phone-number].