Student credit cards are credit cards designed for young adults in college. These are often a first credit card, designed to help build new credit from the ground up. They are a useful tool to teach college students about finances and money management while giving them more freedom to make necessary purchases and live on their own.
Student credit cards are offered through banks, credit unions, and colleges. It is also possible to get a student credit card directly from the credit card company. These student cards usually have a fairly low limit, generally around $250 US Dollars (USD) or $500 (USD), up to about $1,000 USD. Student credit cards almost always have a high interest rate, which should encourage college students to pay off the credit card every month.
As with any credit card, it is important to pay the bills on time and always pay more than the minimum payment required. Student credit cards will start to build good credit, but only if the finances are managed responsibly. Some of these credit cards for students offer cashback bonuses or points that can be redeemed for merchandise. Others offer a lower interest rate or some other type of bonus for skills specific to students, such as getting good grades or consistently paying the bills on time.
Student credit cards are a great way to help students manage their college finances. These cards might be used to pay for books in the bookstore, gas and groceries, clothing or even fun items. If made to pay their own bills, college students will quickly learn the dangers of overspending and recognize the difference between needs and wants. Student credit cards also help students learn important lessons about finance charges, fees, and annual percentage rates.
Some student credit cards require a co-signer, which is usually a parent or caregiver. Be cautious when co-signing on a credit card, as any late payments can negatively affect your credit score as well. It is certainly possible to find a student credit card that does not require a co-signer. College credit cards also do not usually require an application fee, minimum income amount or a yearly fee, and are generally pretty easy to obtain.
After the student graduates from school, he or she can usually convert the student credit card into a traditional credit card with a higher limit. Even if this option is not available, he or she will be able to apply for a traditional credit card because they will now have a credit history. Acquiring a student credit card is a great first step for the future.