Best Student Credit Cards of July 2021

If you want a student credit card, you will need to understthese fees terms to find the best fit.

APR

This is the interest rate you are charged if you do not pay off your balance during the card’s grace period. A grace period is the time between the end of a billing cycle the date your payment is due.

Credit card APRs are typically variable, which means they will fluctuate with the federal prime rate, an index that sets rates for consumers on credit cards loans. Your credit card interest rates will rise fall along with federal interest rates.

How Credit Card Interest Works

You won’t owe interest on purchases as long as you pay your balance on time every month.

If you only pay part of the balance by the end of the grace period, the remainder carries over accrues interest that will appear on your next billing statement. New purchases may not receive a grace period could begin accruing interest immediately.

You can quickly fall into credit card debt by carrying a balance continuing to charge purchases to your card. If this is you, stop using your credit card until the balance is paid.

How Long Will Paying Off a Credit Card Balance Take?

The answer depends on your balance, monthly payment APR. With APRs for student credit cards ranging from 11.15% to 26.99%, the effect of compound interest can be powerful.

Interest compounds when unpaid interest is added to your balance, the interest rate then applies to the new larger amount. This effect is also known as interest on interest.

The example below compares payoff times interest savings for three different monthly payments.

Doubling your minimum payment from $35 to $70 per month cuts your interest by nearly 62%. That’s how being as aggressive as you can in paying down a credit card balance can pay off.

Introductory APR

Some cards provide new users a 0% APR on purchases, balance transfers or both for a limited time. Offers may range from six to 21 months after opening the account, you could risk losing the rate if you make a late payment.

Penalty APR

A penalty APR is a high interest rate that applies if you make your credit card payment late. Your card issuer can charge the penalty rate when you’re at least 60 days late paying your bill. Student credit cards charge an average penalty APR of 29.995%, according to U.S. News research.

Cash Advance Fees

Cards charge higher APRs for cash advances than for regular purchases, plus fees. A cash advance does not have a grace period, which means interest begins to accrue on it immediately. You will pay an average of 3% to 5% of the amount, or a minimum of $5 to $10, whichever is greater, according to U.S. News research.

Annual Fees

Credit cards for students rarely charge annual fees. Annual fees can be small or large, ranging from $25 to $550, sometimes the first year’s fee will be waived. A card with a big annual fee can come with a lot of perks allow you to earn more rewards than a card with no fee.

Foreign Transaction Fees

Your credit card may charge a foreign transaction fee of 1% to 3% whenever you buy something outside of the United States. This fee can apply when you’re physically in another country or when just your transaction takes place abroad.

Late Payment Fees

Your credit card company will charge a late payment fee if you miss a payment or fail to pay the minimum by the due date. Federal law limits late fees to $40, a creditor may waive a late fee for a first offense.

Also, the law states that the fee can’t exceed the amount of the violation. For example, if your minimum payment was $20, the maximum late fee you can be charged is $20.