Credit Cards or Student Loans and Possible Changes

credit cards

Students…

FIND the top student credit cards now.

Many college students find themselves in a borrowing dilemma, asking themselves should I open a student credit card account or take out a private student loan. Let’s look at the advantages of both. With a credit card, credit limits are somewhat low, with an average range of $500 to $2000. A college student credit card requires immediate monthly repayments, which ultimately decreases total debt owed from the onset and help set forth the practice of repayment at on a smaller financial scale.

Currently, students need to be 18 years old to qualify for a student credit card, however this may change if THE CREDIT CARD ACCOUNTABILITY RESPONSIBILITY AND DISCLOSURE ACT is passed and signed in to law.

As it currently reads, a portion of the ACT is worded as “Ensures Adequate Safeguards for Young People;”

“Requires issuers soliciting to persons under the age of 21 to obtain an application that contains: the signature of a parent, guardian, or other individual who will take responsibility for the debt; proof that the applicant has an independent means of repaying any credit extended; or proof that the applicant has completed a certified financial literacy course”

This bill still needs to move through Congress, the Senate and then signed in to law by the President. It would obviously bring about significant change to the current student credit card landscape and potentially make it more difficult for college students to obtain their own student credit card by themselves. It can also be viewed as a positive change with the aim of safeguarding young people’s financial futures, depending on the way you look at it.

One question being asked by some is how will this effect consumers and students under 21 who do not have a parent or guardian to co-sign for their student credit card, but do have the means to repay the extended credit and build their own credit profiles for a positive financial future. Could this bill place limitations on consumers or students who would have prospered with responsible credit usage, but did not have the freedom to do so? Time will tell.

Moving on to STUDENT LOANS
Private student loans often come with a lower interest rate than is offered with most student credit cards. Repayments are usually deferred until after graduation, which is an advantage for many. There are also significant potential changes to the federal student loan landscape on the horizon, but for now college students can still qualify for private student loans if they meet certain criteria set forth by the respective banks and lenders they are applying with. It is wise to exhaust all efforts in finding as much federal aid, grants and scholarships before turning to student loans. Explore all options!

Student ready to compare credit cards can find college student credit cards HERE.
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Student credit cards.com @ April 9, 2009