College Student Credit Cards
Student credit cards are specifically designed for college students with little to no credit and low if any income. They give college students the opportunity to prove their credit worthiness with a small line of credit, while still providing a valuable tool for budgeting and money management. If you have been denied a college student credit card, you can try a credit card for poor credit instead.
Are you a college student looking for your first student credit card? There are many student credit cards designed specifically for your needs! Many student credit card issuers are willing to take a risk with students in hopes of creating new, credit savvy customers. In many cases, parents do not have to cosign and if you are over 18, a student credit card is a great way to start building your credit history.
More on College Student Credit Cards:
Many college students only have access to credit due to their parents giving them a credit card usually attached to their personal bank account. Using your parent’s credit card will not improve your credit score or build up your credit history! Without credit, it will be almost impossible to get a car loan, home mortgage, or any other line of credit without the help of a cosigner or partner. College student credit cards give you the opportunity to build a positive credit on your own.
Student credit card companies also recognize the value of offering opportunities to college students as well as new borrowers. Although some lenders will require a co-signer, typically, a college student credit card works the same as standard credit cards issued by any major financial institution or banks with just a few exceptions:
1. Lower Credit Limits: With little or almost no credit history, a lender is taking a risk with a college student. As a result, the credit limit is typically kept low, usually between $500 and $1,000, to limit the risk to the lender if the accounted is defaulted.
2. Higher Interest Rates: Since students do pose a slight credit risk, higher interest rates also apply to college student credit cards. Higher rates help limit the potential loss from account defaults and spread the cost across high risk accounts.
3. Account Co-signers: If required, a parent or guardian signs an agreement to back-up the credit card loan if the student has trouble making the payments. A typical student credit limit is $500 and the co-signer has control over whether an increase in the limit is accepted.
Before applying for any college student credit card, consider the following:
• Be sure you can afford any minimum monthly payment. A representative can assist you over the phone, or you can find many helpful tools on the web to determine your payments. Consider carrying a low balance if payments are too high. Alternatively, do not carry a balance at all, and only charge what you can afford to pay off each month.
• Understand the fees that will apply if your payment is late or if you miss a payment. These fines will be pretty big if you are a new borrower.
• Understand how introductory offers work. Introductory interest rates are only temporary! Do the math and see if you can afford to carry, a balance after the intro period is over. If you can not, make sure you can pay off the balance or reduce it to a manageable level beforehand.
• Do not apply for a college student credit card just to get cool stuff. Applying for too many offers sends a message of desperation to lenders who will deny future applications.
Student credit cards.com @ September 23, 2008