Student Credit Card
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Provided By:
www.personalfinancebudgeting.org
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Both college and high-school students can be issued a student credit card. It’s niche of the financial market considered Klondike for many of the banks and credit card issuing companies. Unfortunately students often have no or very little financial responsibility, and get into serious financial troubles just because they can freely use student credit cards.
The first thing that students usually don’t realize is that possessing a student credit card is very useful for establishing good credit history. The second thing that they don’t really realize is that actually the way they maintain the balance of their credit cards is actually having effect on their future credit history. An irresponsible financial behavior can not only wack them up in serious debt, but also ruin their credit score in the very beginning of their independent “financial live”. Most students see sudden financial freedom and just spend. In reality having a bad credit score can one day ruin your application for a mortgage, loan, a car leasing, even work opportunities.
To prevent from possible downfalls every student has to gain at least a little knowledge how to manage student credit card debt.
Before applying for a student credit card do some research first. Don’t just jump for the first offer (as any student is likely to get a lot of credit card offers). Student credit cards after all are like the credit cards issued to adults. You should look for the same factors – annual interest rate, variable rate information, grace period for payment of balance for purchases, annual fees (if applicable), late payment fees, any other additional charges, etc. Don’t be tempted to apply for the first student credit card offer blinking with a lot of zeros (0% APR, 0% liability etc). There might be a lot of sandbanks and you might end up with a huge debt and ruined credit rating. Read carefully your contact and all the small print, if uncertain – advise with your parents or a specialist.
Second rule – try to be responsible and acquire a very good control over your spending. If necessary make a list with your expenses to actually see where your money is going. Try to pay off your monthly in full, as paying just the minimum allowed will only expend the debt period and you’ll pay more.
Finally let’s look at the benefits of having a student credit card. If beign strict and paying off your obligations toward the credit card company on time, you will build up an excellent credit history. This will help you later on when it’s time to apply for a normal or a premium credit card. Having a credit card is a major advantage as you have handy cash for your daily expenses (textbooks, student supplies etc) and especially in case of emergency. Most of the student credit cards come with sweet reward programs – travel reward points, reward points that can be used with some merchants, cash back etc.
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