Credit Card 101 - Part 1

Before you begin, Take the Pre-Test.

Are Credit cards BAD?

No, they just need to be used with caution. First of all, no one is telling you to cut up your plastic and return to the Stone Age. Credit cards are an indisputable fact of college life and there are many good reasons to have one. Credit cards give you protection for your purchases, allow you to shop online, and provide a cushion in case of emergencies. Many credit card companies set up booths and tables at the beginning of the semester, offering sign-up incentives such as T-shirts or water bottles. But before you sign on the dotted line, keep these facts in mind: Interest Rate: Credit is not free! The interest rate reflects the amount they charge you for that service. In fact; they're really high interest loans in disguise. Here's a breakdown of some typical credit card fees:

1. Finance charge: This is an interest charge (can be as high as 20 percent) on the unpaid portion of your bill each month. Including service fees, late fees, transaction fees, and other charges

2. Annual fee: Some companies charge yearly membership fees of anywhere from $20 to $100.

3. Cash advance fee: Avoid cash advances - fees are steep, and interest rates are usually higher.

4. Late payment fee: Paying late can also result in hiked interest rates.

Other terms to know if you want to be able to save some cash;