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Q: What's the best interest rate I can get with a student credit card? How do I know if I'm eligible for this low rate?
A: The best interest rate for any credit card, including one that is specifically designed for a student, is between 12.99% and 19.99%. Anything between these numbers usually allows for more manageable payments. Of course, you still have to practice responsible spending habits.
These rates are almost always variable.
This means that if the prime interest rate (the one set by banks and other lending agencies based on different financial information) changes, so will your interest rate.
There are cards with fixed rates; that is, whatever interest rate you were offered at the time you applied for the card will remain at that figure, no matter what the prime rate does. However, these rates are usually higher than variable rates. Some can be as high as 22.99% or even more.
You should also know that just because a credit card offers a low rate, you might not be eligible for it.
The card company will take several factors into consideration, including your income and credit history.
If you have only recently established credit, or if your credit rating is rather low (and this can vary from company to company) you may not qualify for the lowest rate.
Still, as mentioned earlier, even 19.99% usually allows for lower monthly payments.
Also, once you have established a good payment record, you can also request that your interest rate be lowered.
We recommend you apply for a card targeted at college students. (Click here to find the Best Credit Cards for College Students.) This way you can:
- Increase the possibility of getting a lower interest rate
- Build your credit
- Find a rewards card despite your limited credit history