Prepaid student credit cards

Prepaid student credit cards

As you prepare to go away to college, the thought may have crossed your mind to apply for a student credit card. But if you are relatively new to the credit world, you may not have enough of a credit history to qualify for one. Instead, you might consider a prepaid student credit card.

Like a student credit card, prepaid cards function in the same manner. The cardholder receives an actual plastic card that is linked to an account. The card can be used to purchase goods and services at a variety of locations. Prepaid cards feature a common card brand name on them and for all intents and purpose look and act like an actually credit card.

The big difference is, prepaid student cards are not actually credit at all. Instead, the cardholder deposits money in a pre-determined account that is connected to an account. This is similar to how a debit card is joined to a bank account.

Prepaid student credit cards are also ideal for minors, who otherwise are unable to own a credit card. Teenagers can obtain a prepaid card and use it to build their credit history while they are still in high school. Then, upon graduating or turning 18, the student can apply for a student credit card to use during college.

There are some cons to prepaid student credit cards. They usually come with an assortment fees such as a monthly convenience fee and even an interest fee. This can be a bit of a deterrent considering you are using the card to spend your own money and not money from a credit line. Prepaid cards are also harder to come by, making it difficult to “shop” for a card with a desirable interest rate and term plan.

To learn more about student credit cards, visit www.studentcreditcards.com.