Students, especially college ones, are really fascinated with the freedom and independence that campus life brings to them. Along with freedom comes a lot of confusion and misconceptions about the future financial life. Students are especially confused about Credit Cards. There are some key questions they ask from their peers and everyone who cares to listen.

1. How do I pick a credit card?
2. Do I need a credit card?
3. What is my credit score?
4. How do I establish my credit?
5. Aren’t these store credit cards too good to be true?
   

   
   

They must ask these questions as the answer to these important questions are very crucial for their financial future. As a rule of thumb, you should start building your credit history as early as possible. According to some reports, 20% of your credit score is determine by the age of your oldest credit account/card.

Credit Cards are complex stuff. student often have misconceptions about them. to clear those misconceptions, I have tried to list 5 most common myths about credit cards.

Myth #1:  You can not establish a credit without Credit Cards

Credit Card is just one of the tools you need to establish a credit history. Actually you can open a credit account by applying for a car loan, student loan, a mortgage OR a credit card.

It helps to have a credit card but it is not all. There are plenty of ways to establish credit history without credit card.

Myth #2: My Own Credit Card means Good Credit Score, Simple!

Not that simple kid! Credit card is just a part of the whole puzzle. If you don’t payback credit card bills on time. you can get into some serious trouble for rest of your life.

Myth #3: Best Credit Card deals are offered by Large Bank.

Opposite is true. Best Credit Card deals are offered by smaller banks. Local Credit Unions offer best APR (Annual Percentage Rate) credit cards. Their customer service is very good. Big banks will actually eat you alive… literally.

Myth #4: I can get a credit card without my Parents knowing about it.

Party is over. Under the new credit card law called Credit Card Accountability Responsibility and Disclosure Act of 2009  is in place and anyone who is under 21, needs to co-sign with an adult to get a credit card. Chances are you will not be able to find any one who is willing to be a co-signer except one of your parents.

Myth #5: Store Credit Cards are Best Deals

Store Credit cards are worst of the lot. They look good on face. You get huge percentage discounts and no fee for first year may be. but what your credit card company is not telling you is the huge late fees, very high interest rate, aggressive over the limit fees while keeping the line of credit at $500 – $600 at start.  these card are a night mere to be kept for long.If you cut them they will hurt your credit score. If you keep them you will hurt your pocket.  Here is a guide on how to cancel your credit cards properly.

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