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Why Education Loans Are Better Than Credit Cards

You need some more cash for university expenses this semester. Do you whip out a MasterCard or any other types of credit cards to purchase your books, or do you apply for a federal or non-public/ private loan? Well, think about the choices -

With a federal loan, your interest rate is low (around 5%) and your payments are deferred till six to nine months after graduation.

Student Loan or Credit Card

With a non-public/ private loan, the interest rate is slightly beyond with a federal loan however can still be less than average. Additionally, you may solely have to be compelled to build interest payments till once graduation.

With a credit card, on the opposite hand, the interest rate will be as high as 21%. Interest begins accruing presently, and you would like to start paying off the bill consequent month.

This is to not say that credit cards don't have an area in your student life. It’s smart to own one national card (Visa, Discover, MasterCard) on hand to assist you build a positive credit history and to supply security in emergencies. After you plan to apply for a card, compare yearly fees, interest rates, and introductory offers. And to stay yourself out of debt, try to do:

# Pay your balance every month to avoid your interest charges/ fees.

# Pay your bill on time to avoid late charges/ fees.

# Avoid money advances, that accompany giant finance charges and interest that begins accruing immediately.
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