Student credit cards can be a great way to start a student under financial independence and become an honest adult. Many parents of students decide to open credit card accounts with their children or add them to their own accounts. However, another good option is to help a young adult get his or her student credit card.
Why Should I Get a Student Credit Card?
Since a student credit card is in the name of a young adult, it is helpful to start building credit. The longer a person's credit history, the better his credit results. So, the sooner one can start building that credit history, the better. On the other hand, a college student who has access to his or her parent's account may adversely affect his or her parent debt when large debt is collected. Therefore, it is not only the credit cards that college students help to build credit history and financial literacy, it also protects parents.
Why Do Credit Card Companies Offer Special Credit Cards to Student?
Getting your first credit card can be difficult, especially if you want to get a decent APR. Credit card companies recognize the importance of college education and think that a student with a limited credit history may be more responsible for paying off a credit card than someone who does not work for a secure future. In addition, student credit cards are a good investment in credit card companies because many people tend to feel loyal to their first credit card. Therefore, credit card companies hope to establish long-term relationships with students by being their first card.
Are Student Credit Cards Beneficial?
In addition to the natural benefits of teaching student responsibility, many have additional benefits. Some have prize programs and refund programs. Still others offer discounts at places that are important to students, such as bookstores. Not all credit cards for college students have these benefits, however, so it is important to compare all the cards closely before deciding what you want.
What Are the Different Types of Student Credit Cards?
When it comes to college student credit cards, you have two main options: safe or unsafe. Credit cards that are secure for college students are prepaid bills, which make these cards look like bank cards. Many college students and their parents choose this type of card because it is in the student's name, reported to credit bureaus, and parents can give a young adult a regular "grant". In addition, there is no chance of creating bad credit with a secure credit card because the credit line cannot be extended.
Unprotected credit cards are similar to traditional credit cards in that the credit line is extended to the student. These cards offer more freedom because payments do not have to be made in advance. And they are ready for a college student if he or she needs a loan to help finish school. On the other hand, these student credit cards must be closely monitored to ensure that the student does not fall into insurmountable debt.
Is There a Difference Between Student Credit Cards and Custom Cards?
Sometimes, a caregiver needs to sign a joint credit card for students, which is not the case with traditional credit cards. In addition, student credit cards often offer a lower credit limit than other cards. Generally, these credit limits can be as low as $ 500 or $ 1.00. Student credit cards can also have a higher interest rate than traditional credit cards, although not much higher than the APR on some credit cards addressed to those with a limited credit history.