Credit Card Accountability, Responsibility and Disclosure Act

• A law that directly affects student credit cards is the Credit Card Accountability, Responsibility and Disclosure Act (CARD Act), which was enacted in 2010. If you are younger than 21, the act requires credit card issuers to give maximum credit limits of $500 or 20 percent of your annual income. In addition, students may need a co-signer for approval. This law was passed to protect students from acquiring too much debt but not to keep them from getting credit cards.
  
  

Interest Rates

• The rates available for student credit cards are generally higher than traditional credit cards. If you don't have a co-signer, interest rates are generally higher. The rates typically range from 11 percent to 25 percent, so students should shop around for the best interest rate. High interest rates can also get students into trouble as they lead to higher debt and longer payback periods.
  
  

Annual Fees

• Companies that issue student credit cards generally charge fees for issuing the cards. Read the credit card contract to understand all the fees associated with your card. Many students are not aware of all the annual fee levied by many companies that issue student credit cards. Some credit cards for students do come without annual fees, and many companies will agree to waive the fee for applicants.
  
  

Building Credit History

• One of the benefits of acquiring a student credit card is that it can help young people build a credit history. It's vital new credit card holders verify that the credit card company will report their payment history to all three major credit bureaus, TransUnion, Equifax and Experian. Use your card responsibly by making your payments on time and charging only as much as you can afford to pay off when the bill comes. Students also would be well-advised to examine their credit reports from each of three bureaus once a year to ensure accuracy of their credit history.