(Newswire.net — May 7, 2022) —
If you have student loan debt, it’s essential to choose a credit card that’s right for your situation so you can optimize your finances while staying on top of your loan payments. Here are some things to look for when choosing a credit card.
Why does my student loan affect my options for credit cards?
When you have student loan debt, your options for credit cards are often limited because many credit card companies view student loan debt as a high-risk investment since it cannot be forgiven when declaring bankruptcy. This means that they may not approve you for a card if your total student loan balance is high enough.
In addition, having both student loan debt and existing credit card debt can be a double-whammy that significantly limits your chances of getting approved for new credit. If you’re carrying a considerable amount of debt, it may be in your best interest to look into debt consolidation strategies before applying for any new credit card or loan.
What to look for in a credit card while having student loans
1. Low-interest rates
Look for a credit card with a low-interest rate. Many companies offer low, or even introductory 0% APR rates to people with good credit ratings. If you have debt, a card with an introductory 0% APR period can be used to transfer your debt. This will help you save money on interest and reduce your total amount of debt if you can pay it off before the introductory period ends.
2. Rewards programs
Many credit card companies offer rewards programs, which can be a great way to earn free flights, gift cards, or other discounts. If you’re able to pay your monthly student loan payment with a card (and pay it off), you can maximize these rewards. Make sure to compare the different rewards programs offered by different cards before making a decision.
3. Flexible payment options
When you have student loan debt, it can be tough to pay all your bills on time, so look for credit cards that offer flexible payment options. This means that you can easily make payments on your card without having to worry about getting behind on your debt. Some good choices for flexible payment options include cards that allow you to adjust the date of your monthly payments, or have a set period of time where you can’t spend more than a certain amount.
4. No annual fees
One of the best things about credit cards is that they can help you build your credit history. However, choosing a card with no annual fees is essential if you have student loan debt. Your money should be put towards reducing your student loan debt as quickly as possible, and additional yearly fees only take vital cash away from paying off your debt.
The bottom line
When choosing a credit card, make sure to consider your own needs and what’s best for your budget. If you have student loan debt, be sure to choose a card that offers great benefits and rewards programs.