College credit cards are designed for students who do not qualify for regular credit cards because of lack of credit history or steady income. These are more restrictive or have more conditions than the generic cards. The restrictions of these include needing a co-signer from a parent or guardian on the account, a lower credit limit and higher interest rates than traditional cards. There are some cards that have lower interest rates for students who maintain good grades.
There are also advantages to having a college credit card. First as a student, having one can help you to establish a sound credit history at an early age which you help you to establish your financial future regardless of your employment status.
Second, a college credit card has become a necessary tool for most students. Having one can be an advantage if you understand how the credit card works and if you use it responsibly.
Instead of getting a college loan, students can use their cards to pay for their tuition, books, college expenses, gas and other expenses. These cards can be pre-paid with a ceiling on the credit limit so the student does not overspend.
Most student credit cards have many similar features which include:
0% APR on the initial 6 month on both purchases and balance transfers, no annual fee for the first year and online account management at no cost.
A college credit card is a good thought and a bad thought for students. If used correctly, it can be a good financial asset. However, if used incorrectly, it can have devastating consequences such as ruined credit
Student Loans versus Student Credit Cards
As with student loans, credit card debt must be paid back. However, there is a difference between them. Student loans have fixed interest rates, depending on the type of loan and a students' credit rating, amount of loan, and repayment terms.
With credit card offers, there's always usually a catch. Some of them have an interest rate as high as 22%! Yikes! Often, students don't think of the finance charges when they accept the credit card offers and they rush off to get a handful of college credit cards to pay for their expenses. If used irresponsibly, this can have serious negative effects. However, it can also be a great way to cover your school expenses.
Students often easily bite off more than they can chew by taking on to many credit cards and making only minimum payments after they run up a large amount of debt. As with student loans, it would be a wise idea to determine how much expenses will need to be covered with a student credit card and then plan accordingly.
Don't be a rabbit chasing the carrot dangling in front of you. Think ahead, plan and then be responsible before you determine if you need one or not. This will make getting a college credit card an asset to your financial future.
College credit cards are widely available, so choose wisely. |
