Student Loans : Credit Card
It is good to have one national card (Visa, MasterCard, Discover) on hand to help you build a positive credit history and to provide security in emergencies. Do you whip out a credit card to pay for your books, or do you apply for a federal or private loan. With a credit card the interest rate can be as high as 21%. This is not to say that credit cards do not have a place in your college life. Students and families with excellent credit will generally receive lower rates and smaller loan origination fees than those with less than perfect credit.
If you don’t repay your student loans on time or according to the terms of your promissory note, you might go into default, which will affect your credit rating. Here are some consequences of default: National credit bureaus can be notified of your default, which will harm your credit rating, making it hard to buy a car or a house. The parents have signed the master promissory note to pay and, if they do not do so, it is their credit rating that suffers.