You have heard it all before. Credit cards are convenient, making it a must for day to day living. In the past when student credit cards were mentioned it generally referred to college students, but this is not so anymore. Today even high school students are now part of the group referred to when student credit cards are mentioned. Students barely in their teens being enticed into signing up and taking credit cards they barely know how to manage, and with terms they know little or nothing about.

Even though student credit cards today are geared towards very young students they still carry the same weight and penalties that come with credit cards for adults. Given this it is important for these students seeking credit cards to understand the meaning of all the terms that are associated with credit cards. The terms work the same and the penalties attached carry the same potentially credit damaging results if not understood.

Three credit Terms that need to be understood

Annual Percentage Rate

The annual percentage rate basically has to do with your credit card balances and how much you would pay if you take out a cash advance, carry over a balance, or take out a cash advance.

Grace Period

The grace period is the number of days a credit card holder has to pay a charge in full without incurring a finance charge or other penalties. After this time penalties in the form of finance charges and other penalties will be incurred.

Credit Limit

The Credit limit is the amount of credit or money that a credit card holder is free to spend on purchases, transfers, atm cash advances, and other financial transactions with you credit card. Going over this limit usually results in a finance charge.

These are the most important terms that will keep student credit card holders from making potentially credit damaging mistakes. It is also good to understand that credit cards usually fall under three categories, namely, secured, regular and premium. Secured credit cards are credit cards that are backed with funds from the potential credit card owner. Regular credit cards unlike secured credit cards do not require any deposit, and are issued with initial funds from the credit card company. Premium credit cards offer higher credit spending limits and usually come with perks like travel insurance, frequent flier miles or rebates on certain goods.

Using credit cards responsibly should not be overlooked since it affects every facet of living, from securing an apartment, to buying a car and securing a loan. Used responsibly a credit card can help students get approved for any application that involves a credit history look up.

Proper usage of credit cards will result in a good credit rating and generally make their financial situation easier and better to manage. So before you go to town with that new plastic remember it offers two choices, servant or master. Used responsibly it provides many benefits like low finance charges, zero down payments when applying for that new apartment and other financial benefits, but used irresponsibly it becomes a master dictating how you live financially.