By John Campbell

If used wisely, student credit cards can be excellent credit builders.

For many young adults, credit building is easier said than done. Many credit card companies don’t want to take the risk of granting credit to someone who has little or no credit history. For college freshmen putting themselves through college, making ends meet can be very difficult without at least one available line of credit for emergencies. Recognizing the growing need for credit from this demographic, many credit card companies now offer credit cards specifically for college students.

Many of these cards offer 0 percent introductory periods for up to six months on everything from purchases to cash advances and balance transfers. Other incentives such as cash back on eligible purchases and no annual fees are just some of the perks associated with many of these cards. With so much competition now in the credit card industry, the savvy student can easily shop around to find a card with the best offer available.

If you’re a student in the market for a college credit card, there are a few things you need to know about these cards. For starters, after the introductory period your card’s annual percentage rate (APR) may rise almost as high as 18 percent. Miss any payment whatsoever and your APR may skyrocket as high as 29 percent. The higher the APR is over the prime rate, which is offered to many credit card companies’ best customers, the less you’ll want to use the card.

You’ll also have a lower credit line initially. No matter how small your credit limit is, you should avoid going over 30 percent of your available credit limit if you want to achieve the maximum credit building success with your card. Otherwise, if you max out the card and wind up making the minimum required monthly payments it will take you a very long time to pay off your card. Remember, the goal is building credit, not overextending it and creating an additional financial burden.

If you use a college credit card wisely, once you graduate from college you’ll likely qualify for larger lines of credit with better interest rates and terms. Think long-term and the rewards will be much more than a few dollars and cents.

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John Campbell is the writer and editor of CashBuzz, A financial portal for the rest of us. Check out cashbuzz.com for the latest articles on money management and tips and tricks that can help improve your finances. This article may be reprinted on your Web site if the copyright, author information and active link are included.