3 posts tagged “credit cards for students”
Credit cards today have become an integral part of our lives. They have become a necessity for college and school students also. A student credit card facilitates everything that a normal credit card does. The only difference is that a student credit card is designed to meet the needs of school and college students, with some restrictions.
Some companies make it mandatory for a guardian or parents to sign so that they are accountable for fulfilling the debts the student is not able to pay off. A student credit card usually has higher rate of interest, which reduces the financial risk for the credit card issuing company. Lastly, since hardly any student has established any credit ratings, the spending limit is substantially lower than the normal credit card. The usual limit is between $500 and $1000.
However, the student credit card also offers many advantages. A student can take the first steps towards financial independence through these credit cards. You can establish a good credit rating. This credit rating is very helpful if you plan to borrow money for financing a car, a house or a world cruise. If the credits are paid off regularly and in time, you will gradually gain a good credit rating and this will improve your chances of getting the entire loan improved.
A student learns managing money in a responsible manner through the student credit cards. It is necessary for a student to be adept at managing the use of credit card, which in turn teaches how to manage money in future. You will have to stick to a budget. This will gradually develop into a habit. So the earlier you start to learn how to manage your money and your debts, the better you will be off.
The student credit card with all its advantages has some pitfalls to be careful of. This can be easily avoided if the student is made aware of such situations. It is best for the student to carve out a budget and stick to it so as to keep overspending in check. It is good to have a practical idea of the spending and income. It is good and necessary for the student to stick to the budget.
It is good to not opt for a student credit card if you cannot afford it. However, a student credit card has marvelous power. It gives you the power to buy at the same moment a concert ticket, a dinner or the latest fashion attire. It is easy to ignore the need to think about it but it should be planned well in advance.
As said earlier, a student can become financially independent but only if the student credit card is used judiciously and wisely.
Are you planning to apply for a student credit cards? If this is your first time, this article will surely help you out.
Are you a student about to enter college? If yes, have you thought about getting your own student credit card? Perhaps you may think that having a student credit card is not in your list of priorities. Some people may even have a negative impression about credit cards for students, thinking that owning a credit card will only put the student at risk of debt.
It is true that having a credit card involves responsibility. However, when used correctly a student credit card actually has its advantages. Here, we’ve listed the major advantages of owning a student credit card that you should consider:
Get approved for a good credit card deal with no hassle. Generally, the best credit card deals in the market require good to excellent credit. An applicant must also have a stable job or a reliable source of income in order to get approved.
This is not the case for student credit cards. In fact, this would be the only time you can apply for a credit card without worrying about these requirements. Once you’ve graduated, you will not be qualified to apply for a student credit card any longer.
Build your personal credit history early. Having a student credit card is a tool for building your credit history. Why is it an advantage to have an early credit history?
Lenders and insurers have more confidence in clients who have a clean record of credit history. Thus, the older your credit history is the better candidate you would be in the eyes of lenders. It is no secret that the best rates and terms are given to customers with the best credit rating.
Take advantage of the opportunity to purchase online. Purchasing from online merchants is not only more convenient, it is also cheaper. Online shops often sell goods at a lower price compared to regular shops because of lower capital. Enjoy great savings and discounts when you use your student credit card to shop online.
Use a Student Credit Card to Your Advantage
As we’ve said in the beginning of this article, being a credit card holder involves responsibility. It doesn’t matter whether you own a regular credit card or a student credit card - all cardholders must be aware about their obligations to avoid the risk of debt.
To sum it up, there are four rules that a student must remember when using a credit card:
1.
Use your student card only for important purchases. Don’t use your
student credit card for things that you can pay in cash. Never use your
card for an unplanned purchase.
2. Pay your bills on time. Building a solid credit history largely depends on how timely you are with your payments. Be conscious about your payment due dates and always submit your payments on time.
3. Monitor your account regularly. You can do this by examining your monthly bills and accessing your online account (if your credit card company provides online access). Make sure that there are no unauthorized charges in your account and if there are, inform your student credit card issuer right away.
4. Pay off your monthly bills in full. To avoid debt build up, it’s best to settle all your student credit card bills each month. Doing so will prevent you from maximizing your credit limit and frees you from additional costs like the APR and late penalty charges.
Some people have the negative notion that owning student credit cards lead to bad credit. This is because many students have been prone to credit card debt and some have even resulted to bankruptcy. But owning student credit cards doesn’t have to be a bane if you can avoid these student credit card mistakes listed here:
Signing up for the first college credit card you see. There are many college credit cards to choose from but most often than not, a student simply signs up for the first offer he or she receives. You may have received an attractive credit card from your mail or email. But when applying for your first credit card, you should do all the necessary research about the details and terms of your chosen card. If not, it is possible for you to get stuck with a student credit card that imposes unreasonable rates and charges.
Using up your credit limit in full. This is another common mistake that students make. Every credit card holder is given his own credit limit which he can use when using his credit card. However, this doesn’t mean you should maximize the entire allowable credit limit you are given. You should be aware that maximizing your credit limit leads to penalty charges and increased in rates in your account.
Not paying your bills on time. A student credit card debt is meant to be paid off on or before its due date. Untimely submission of payments is the number one cause why many students fall prey to bad debt. As a student credit card holder, you should always be aware of your payments and religiously keep up with them. In addition to this, untimely payment creates a negative impact on your credit report. Therefore, in order to maintain an excellent credit standing, you should never allow delays or misses in your credit card payment.
Using your student credit card on all your expenses. Credit cards for students are supposed to help you with your school expenses especially during inconvenient times. But this doesn’t mean you should get in the habit of using your student credit card for paying restaurant bills each time you eat out or when partying with friends. When you own a credit card, you should be more aware and responsible in how and where you spend your money. Bear in mind that everything you spent using your credit card is a debt that must be paid on time.
Not taking care of your student credit card. Another mistake that students often commit is being too careless in handling their cards. Leaving your credit card where other people can easily access it or copy the details such as your student credit card number puts you at great risk of fraud. Many students have obtained unauthorized charges in their credit without their knowledge because they have failed to be more cautious with the use of their student credit cards. If you own a college credit card, you must be more vigilant in handling it.
