Description: If you are in college and you want to start building a good credit history, here are some details about student credit card plus features it should include
Student Credit Cards – What you Need to Know
Most college students, especially newbies, are usually spoilt for choice when it comes to choosing the right bank card. Lots of plastic card offers come their way. On average, a new college student receives a minimum of six card offers during their first few days on campus. Yet these deals are not always the best for students.
The internet offers far more great options when it comes to student credit cards. It is one of the simplest ways to offset bills. Upon request for a custom writing price, you can make payment online to someone for writing your essay. However, before applying for credit card, you need to first know it’s features and how to use it more efficiently.
Features of a Student Bank Card
One of the purposes of students plastic money is to cater to the financial needs of high school and college students. Moreover, these cards have a wide range of features including minimum payments due, balances and interest rates – just to name a few. Unlike regular ones, a student credit card comes with features that are specially designed for the younger generations. These include:
- High-Interest Rate: It is usually issued to individuals who have little or no credit history. Companies issuing these kinds of cards are great risk takers. For this reason, student credit cards come with high interest rate.
- Lower credit limit: Another unique feature of these kinds of cards is that it has lower credit limit when compared to its regular counterpart. The limit hovers between $500 and $1000. This way, the student learns how to manage finance judiciously while reducing any potential loss to the company issuing the credit card.
- Co-sign requirement: Most credits cards for students require more than one signature. Either a parent or guardian must append his/her signature during the application process. This ensures that if a student finds it difficult to pay the balance, the second signatory will cover the cost. Furthermore, they can help increase the credit limit in the future.
What to Look For When Shopping
Ditch the credit card offers that come your way in school, rather do your own online search. While at it, you’ll find a number of student credit cards to choose from. Prior to applying for one that best meets your requirements, you need to take a second look at your priorities. If your credit card will carry a balance on a regular basis, then it is advisable to go for a student credit card that comes with a low interest rate. Other factors to consider when choosing a plastic card.
- Minimum payment
- Spending habit
- Credit limit
- Loyalty points
- Interest rate.
Despite the fact that most student credit cards come with high interest rates, you can go in search of one that offers the best deals. Go for a credit card with interest rate that is less than 20%. If you are considering paying off the balance on a monthly basis and want a few extra benefits, you can opt for other options such as rewards credit card.
Golden Tips for Student Credit Card Use
Now that you’re in college, you feel the need to become financially independent and prudent.. While it’s a great idea to start building your credit history a bit early, you don’t want to be in debt at such tender age. Of course, freedom and the options of having few extra money to spend is the dream of every student but you have to tread carefully.
Here are some helpful tips to use your credit card judiciously.
The truth is many students think they can’t go past their monthly spending limit even with a credit card. While that may be partially true, it is a wishful thinking. One of the reasons for applying for a student plastic money is to pay off the balance at the end of the month.
There is a high chance of derailing from the plan particularly when you organize a weekend vacation with friends or you find great smartphone deals online. So what’s the ideal solution? It’s simple. Start with your income. Try as much as possible to save no less than 20% of your income, pay your bills ahead of time and the leftover can be used for frivolous activities.
Even if it means ignoring invite for a group weekend vacation with friends or passing up mouthwatering deals, it’s worth it. Staying out of debt is the wisest thing if you want to build your credit score. If you don’t have any side-job and your parent or guardian has agreed to pay off your credit card, it is wise to not exceed your monthly spending limit.
More importantly, do not go beyond any spending limit they impose on you. Don’t make your guardian or parent label you as someone who is financially irresponsible. And if they eventually do, it means they can’t trust you with their funds.
Start With One Credit Card
In truth, you may be tempted to apply for more than one credit card but it will negatively impact your credit score. Each time you apply for another one, you’ll be penalized particularly if your credit history is yet to reach maturity age. The best thing to do is to use your first card for at least 12 months and then you can apply for a second right after.
Make All Payments On-Time
Remember to always purchase what you can easily pay off every month. And make sure you offset the bill. When it comes to credit score rating, the number one factor is payment history. It is therefore important that you make your payments right on-time. Avoid late payment.
One of the benefits of owning a student credit card is that you can begin making prudent financial decisions at a very young age. It builds and prepares you for the future. Once you make any purchase and pay off the balance, it affords you the chance to build a favorable credit history which in turn increases the credit limit. With a good credit score, finding your dream job becomes easier. This is because many employers and human resource managers check applicant’s credit scores before hiring.
To maintain a good credit score and history, refrain from late payment, spend only what you can afford to pay off and don’t apply for a new credit card until after a year at least.