Student credit cards are especially created for college students who are trying to obtain credit for the first time. If you are a student, why should you apply for a student credit card? Primarily, student credit cards are tools for building personal credit history. But why should you establish your credit history while you’re still a student?
Why Students Must Establish Credit History
An individual’s credit report measures an individual’s credit worthiness. After you graduate from college, having a solid credit history to back you up will certainly work to your advantage. Potential employers and even prospective tenants would surely be more impressed if your credit report shows how you have been responsible in handling your accounts and dealings with your creditors. Obviously, it would be a lot easier to get hired for the job you want or get accepted for the apartment you want if you have a credit history.
Even credit card companies base their approval on a person’s credit history. Credit cards that offer the best deals usually require good to excellent credit from their applicants. On the other hand, student credit cards are especially offered to students who have not yet established their personal credit history. In fact, this is the only time that you can get approved for a non-secured credit card even if you have no credit history yet.
Put Your Student Credit Card to Good Use
Some parents may be skeptical about letting students use credit cards. True, the wrong use of credit cards can also cause trouble and may get a student stuck in bad debt. As a student, you must realize that owning a credit card comes with responsibilities and consequences.
If you’re a student credit card holder, how you put your credit card to good use is up to you. For instance, make sure that you only use your card for very important expenses that you need for your studies. To avoid overspending, never charge your personal luxuries on your student credit card. Make it a point to pay off your monthly balance in full to avoid incurring interest rate charges and late penalty fees. It will also save you from the risk of debt build-up.
Having a student credit card can also be a good training for a student on managing his personal finances. Choose a credit card for student that provides an online account access so you can closely monitor your account from your laptop or computer. Thus, even if you’re busy with school work, you can still check your account without disrupting your schedule.
Furthermore, find a student credit card that will report all your payments to the major credit bureaus as this is the only way you can build up an early credit history. Don’t forget that timely payment and the wise use of your credit card are the keys to maintaining an impressive credit history. As you stay consistent with your credit card payments, you can be assured that you will build an impressive credit history for your future endeavors.
Samantha Wilson is a consultant for credit cards for students. For years she has written student credit cards articles that would help build student credit. For more info, visit: www.buildingcreditforstudents.com
What is the purpose of student credit cards?
I mean, I understand the concept of building credit and everything, but what is the point of student credit cards? What is the purpose? I’m sorry if this is a silly question, but I don’t really get it.
And can you trade them in after you’re no longer a student for a “real” credit card? Do people just keep them forever? I always thought closing accounts lowered your credit score?
Answer
Student credit cards offer students with little or no income the opportunity to prove their creditworthiness. They tend to have higher interest rates than standard credit cards since students pose a higher risk of default. But the credit card companies want to gain loyal customers early– and see college students as a great opportunity.
Many BIG issuers have gotten into the ‘student credit card’ game. To see a complete list, visit:
http://www.asapcreditcard.com/student-cards.html
When you decide to upgrade to a ‘regular’ credit card after school– don’t worry too much about closing the old account. Although it will have a slightly negative impact– it’s only short-term.