A student credit card refers to those cards that are specifically marketed to older high school students and college students. It’s technically possibly to obtain a student credit if under the age of 18, but they usually require parental consent and may take into account parent credit rating. There are several types of cards that may be called student credit cards, and these include cards that offer a line of credit, and some that are really debit cards or prepaid credit cards.
There can be numerous advantages to a student credit card. Many don’t require proof of income and have low interest rates. Students may use these cards as a convenient means of keeping track of all expenses, and most offer Internet access to balances so they can be viewed at any time. Responsible credit card users may be able to establish an excellent credit history if they always pay their bills on time and keep their credit balance low.
Many of these cards offer special perks to students, like cash back on purchases or reward systems that might help pay for things like travel. These incentives are attractive but usually are earned only by card use. It’s easy for students to overuse cards and spend too much, to try to take advantage of rewards.
As with any other type of credit card, the student credit card is only helpful if used responsibly. In addition to being a way to establish good credit rating, irresponsible use of the card and failure to meet payments can quickly result in negative credit rating. It’s therefore advised that students keep track of all expenses and never use their cards for impulse buying. These cards also require responsibility when it comes to the matter of paying monthly bills.
Sometimes parents cosign for credit card accounts or offer their older kids access to a debit card that has a set amount of money available. For those who don’t want the hassle of worrying about making payments, this form of “student credit card” may be a better choice. Others use prepaid credit cards, which allow them the convenience of card use without worrying about exceeding credit limits.
While debit cards and prepaid cards do mean only a set amount can be spent, they don’t generally do anything to establish good credit score. Moreover, sometimes a true emergency arises that would take more money than that available in a bank account. In these instances, a credit card really can come in handy. A student who needs to return home in a hurry or has to suddenly pay for significant car repairs might not have the time to obtain money elsewhere to pay for this.
Student credit card offers are variable and will have different restrictions. Some charge annual or initiation fees, and others have low introductory rate interest charges that then climb precipitously once the introductory period has expired. The first step in responsibly obtaining credit is to make sure that offers are evaluated carefully to find the most advantageous ones.
Some students may ultimately be better off getting a cosigned card with parents who have excellent credit. Provided the student’s name is on the account as a creditor, he or she cam still build credit rating. However he or she may do so with much lower interest rates and fewer additional fees than those that would be charged with a student credit card.