8 Tips for College Students Wanting to Apply for a Credit Card

High school life is over. You've moved away from home and you're starting a brand new chapter in your life with college. Independence feels great, but it's sure to feel greater if you've got your own credit card, don't you think?

Here's what you can do to make the credit card application process as hassle-free as possible.

1. Prepare proof of identification. Have your photos ready as well as all your valid IDs. Credit card companies will always have to verify that you are indeed who you say you are before you can proceed any further. IDs where your age is stated are also preferred because you have to prove you're at least 18 years old as well. If you have any bills under your name, take them with you as well because they can serve as proof of residence.

2. Prepare proof of schooling. Credit card companies generally prefer to issue credit cards to students who belong to accredited colleges and universities. If you belong to such a school then you're in luck. If not, you can compensate it by showing your previous records - if they're excellent, that is. Just like when you're applying for a driver's license, issuers also take academic and extra-curricular excellence as a sign of maturity and trustworthiness in your part.

3. Prepare proof of financial assets. Student credit cards tend to charge higher rates than usual, but you might be qualified for lower rates if you're already working or you have money and a bank account in your name. Either way, make sure you can submit documentary proof of your work or assets.

4. Speaking of interest rates, the first thing you should look for in a credit card is the lowest possible interest rates. This might mean not being able to enjoy a reward-based credit card, but at your age, you might not yet afford the higher rates charged by credit cards offering reward points. If you see a 0% APR credit card, make sure to check how long the offer would last and what the standard APR is afterwards.

5. A number of credit cards allows you to apply even without a cosigner, but some of them tend to have stricter application requirements. If you don't want to go through the trouble of submitting additional requirements, simply ask your parent or legal guardian to act as your guarantor when you apply.

6. Always look for a credit card that allows you to manage your account online. This will allow you to check your account balance regularly and know when and how much you have to pay for your credit card every month.

7. There are a few additional perks that you might deem necessary. If you are fond of shopping online, look for a credit card that offers you fraud liability guarantee at no extra cost. Other credit cards offer you "thank you" points for being a prompt payer.

8. Now that you know what you need from a credit card, find one that matches your preferences and then submit your application. Remember to be courteous and answer all their questions honestly. You're sure to have your application approved in no time. Have fun with responsible swiping!

Credit Card and APR Rate

Each bank sets its own terms for the credit cards it issues. Further, a given bank may set different terms for different cardholders, according to their income and credit history (a financial report card of sorts that shows how much money a person owes to his various creditors and how reliable he is about paying his bills on time). If a person has a low income and a poor credit history, the bank must assume that extending credit to him is risky, and it will likely charge him a high interest rate in order to offset this risk (or it might deny his application altogether). On the other hand, if someone has a fairly high income and an exemplary credit history, the bank will rank him as a safe person to extend credit to and will likely offer a lower interest rate.

Annual Percentage Rate (APR)
Annual percentage rate (APR) is one of the most important variables to consider when using a credit card. The APR on the card is the amount of interest, such as 15 percent, the bank will charge the cardholder per year on her revolving account balance. The higher the credit card's APR, the more it costs to carry a balance on that card.

Credit cards usually specify one APR for purchases and another, higher APR for cash advances. With a cash advance the cardholder withdraws money against his credit limit. To do so, he can make the transaction with a bank teller, or he can insert his credit card into an ATM (automated teller machine), enter his PIN (personal identification number), and withdraw cash. Usually only a portion of the card's total credit limit is available for cash advances. In addition, many card-issuing banks charge a cash-advance fee, typically calculated as 2 to 3 percent of the total amount of the advance.

Minimum Payments
Credit card holders receive a monthly statement, or bill, which summarizes the activity (purchases and payments) on the card for that month. The statement also specifies the minimum payment the cardholder must make for that billing period in order to keep the account in good standing. The minimum payment tends to be just a tiny amount (such as 2 to 4 percent) of the total balance; often it is only slightly more than the interest charged on the balance for the same period. Thus, if the cardholder only pays the minimum each month while the balance continues to accrue interest, it can take him years, even decades, to pay off the debt.

Late Fees
A credit card statement stipulates the date by which the payment must be received by the issuing bank. If the payment is late, the issuing bank will charge the cardholder a late fee. Late payments can also result in other penalties, such as an increase in the card's APR and a blemish on the cardholder's credit rating.

Over-Limit Penalties
If the cardholder's account balance exceeds his or her preset credit limit, the bank may charge an over-limit penalty for that billing cycle. In many cases, when someone tries to make a purchase that will put his or her account over the limit, the card will be denied at the point of sale; but if the purchase is only a few dollars over the limit, the transaction will sometimes go through. Also, sometimes it is interest charges that put the balance over the limit.