How a Student Credit Card Can Be Beneficial

There's no denying that the popularity of college student credit cards is on the rise. These days, both parents and students prepare for college by getting a student credit card Usually, parents provide their kids with student credit cards because it is a more convenient way of giving financial support. Still, there are working students who can afford to get a college credit card on their own.

Credit Card for College Students - How Beneficial

Primarily, student credit cards are designed to help young people establish their own credit history as early as possible. Even while in school, students with credit cards are already starting to build up their credit scores- certainly an important preparation as they enter the corporate world.

Nevertheless, building a good credit history would greatly depend on how a student handles his or her student credit card account. Needless to say, a student may be able to establish an early credit history but because of frequent late payments or maximizing their credit limit, there is also the danger of developing a poor credit score or bad credit history.

Therefore, before opening an account, students must first be made aware of their responsibilities as student credit card holders. Parents can play a big role in teaching and training their kids on how to handle their finances effectively. Of course, setting a fine example to their kids is crucial as kids often look up to their parents for learning.

Help Your Student Choose

If you're a parent, help your kids understand the specific factors that should affect their choice. For instance, does the student credit card report to the major credit reporting agencies? Since you'll be using your student credit card to build credit history, you need to make sure that your payments would be reported to the credit bureaus accordingly.

What are the costs of the credit card? Naturally, a student credit card with a low rate of interest is what you want. However, a low APR does not always guarantee the best deal. Aside from the APR, you'll also want to check out the rest of the fees that your college credit card charges. Consider these questions when doing your search for a potential student credit card:

Does the credit card for student carry an annual fee?

If yes, is it reasonable?

Is there an over the limit charge? If yes, how much?

How much is late penalty fee?

Does it provide a sufficient grace period? (usually credit cards provide 25 days while other provide as long as 30 days of grace period) Remember, a longer grace period gives you more time to pay back your balances without incurring the additional interest payment.

Considering the above points means taking more time in searching and comparing different student credit cards. Don't sign up for the first credit card offer you receive in your mail just because it sounds like a great offer. Remember, the only way you can be sure of your choice is by doing comparisons and by understanding the details of the fine print.


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