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College Credit Cards ?Building a Good Credit History at an E |
College student credit cards are intended
specifically for students who normally would not qualify for regular
credit cards, as they do not have a steady income or a credit
history. As a student, it is a good idea to establish a first-rate
sound credit history at an early age, which would help you get a
regular credit card in the future, regardless of your employment
status.
College Credit Cards Versus Generic Credit Cards
In theory, college credit cards are identical to regular credit
cards. However, a college credit card is meant for college students
who do not have previous credit history. Hence, these cards have
more restrictions or conditions than the generic cards. The top
three restrictions include:
- Co-signature from the parent
or guardian at the time of application - Lower credit limit
(Example: $500 to $1000) - Higher interest rates than traditional
credit cards: Normal interest rates on these cards are 16-18%
Advantages of a College Credit Card
A college credit card
has become a necessity for most students. The advantages are many
provided you understand how the credit card works and use it with
caution. Students, especially in United States, are prolific users
of these college credit cards. This is primarily because it gives
them great flexibility to manage their credit.
Students can
use college student credit cards to pay their tuition fees, to rent
a car, or to fill gas. In fact, there are certain college credit
cards that offer low interest rates to students who maintain good
grades. These cards are also packed with rewards and benefits. These
cards help students to learn and manage their finance at a young
age.
A college credit card can also be a pre-paid one,
with a ceiling on the credit limit. This ensures that the student
does not overspend and it also helps parents keep an eye on their
children spending behavior.
Characteristic Features of
College Student Credit Cards:
There are many college credit
card options from Citi, Discover, and Chase. Apart from these, there
are many pre-paid card options. Most of these student cards have
many of similar features including:
- 0% APR for the
initial period of usually 6 months on both purchases and balance
transfers (typically) - No annual fee, at least for the first year -
Online account management at no extra cost
While many of
the above characteristics are also applicable to many traditional
more generic credit cards, there are certain distinctive features
that make the college student credit card stand apart including:
- 0% liability for any unauthorized charges on the account - A good
GPA helps earns points for the cards - Theft and fraud alerts
It is a good thought for students to have their own college student
credit card. However, it is important to understand that, at an
early age, bad credit could have horrible consequences. Parents can
assist their kids in choosing the best college credit card based on
their child spending behavior and repaying capability. College
credit cards promise financial freedom at a young age if they are
used judiciously.
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