For some college students who are virgin credit card holders, plastics are a sweet temptation. The problem, however, is that students are signing up for credit cards regardless of how much they understand about credit.
Not understanding the terms and conditions stated in the fine print may trap students into hundreds of dollars of interest and other fees.
"People just end up signing up for cards out of frustration," said Ziv Yirmiyahu, president of CreditCardClients.com and developers of a free online tool called the Student Savings Agent.
The tool, launched in August, was designed to present consumers with the top 10 credit cards
for saving money based on their individual credit profile in order to avoid debt, according to its Web site.
"My credit score is ... in the hundreds," said Catherine Varner (sophomore-international politics and economics), who has one credit card in her name.
A sleek silver credit card may look good with those sterling earrings, but beyond the glitzy exterior are an annual percentage rate (APR), minimum finance charge, variable rate, daily periodic rate and a grace period.
The Student Savings Agent consolidates information from a database of more than 200 credit card offers, plugs your personal credit history into complex mathematical equations and generates a list of the top 10 credit cards that will save you the most money -- in fewer than 10 minutes.
"If you look at a credit card offer, the first thing you see is the marketing pitch," Yirmiyahu said. "The actual numbers are in fine print. The Student Savings Agent makes the fine print a non-issue. If you don't understand the terms, the tool takes care of it for you; we do the research and give you the bottom line."
Ricardo Ospino (junior-civil engineering) said he didn't look into credit options or terms.
"I got my card through my bank because my parents wanted me to build up credit," he said. "I have no idea what my APR is."
The tool claims to already have helped "tens of thousands of Americans in saving hundreds and thousands of dollars" in credit card debt by ranking the best credit card offers per individual; how much could be saved in a one or two year period; and a breakdown of the calculated savings.
It also offers a link to the terms and conditions of each card. The average savings last month, per visitor, was $1,463.
"The tool would be interesting," said Daniel Grandy (freshman-chemical engineering), "because with credit cards it seems like there's always a catch."
The Savings Agent generates a list from two short steps of about 10 questions. It asks for the type of card currently used, how much you owe on it, and average monthly charges.
The tool is free and requires no registration or personal information.
"You don't even need to know your APR to use it," Yirmiyahu said. "Our database encompasses hundreds of cards, so we probably already know the fee and can suggest it."
