Students and Secured Credit Cards

When you enter college, you may soon find the need to apply for student credit cards. There are a few reasons to get a student credit card. The most common reason to get a credit card is for emergencies. Emergency medical care, vehicle repairs, unexpected school expenses and avoiding starvation may all be reasons to apply for a student credit card. Another reason is simply to start building your credit.
Most students don’t have a credit score or any credit history because of their age. There are special offers from credit card companies out there to combat the problem of constantly being rejected for credit because of an insufficient credit history. Many of these student credit card offers require that you be enrolled in school to qualify. The idea is that you are receiving an education that will later allow you the funds to repay any debts that you incur during college. This makes you less of a risk to the credit card company than someone your age that isn’t in school. It is assumed that you will make more money in the future than those who aren’t furthering their education.
Qualifying for a student credit card is easier if you are currently employed. If you are not, then you still may qualify for a secured credit card. A secured credit card is a card that has a deposit account attached to it. This means that you will be required to deposit money to get the card. You will usually be asked to deposit up to five hundred dollars. This can usually get you a credit limit of between five hundred and one thousand dollars. The credit limit is the amount that you can charge up to.
Secured credit cards show great responsibility and can build your credit very quickly. Basically it tells the credit card company that you have the foresight to save money and use it to build your credit, investing in your future. You must make every payment on time and pay more than the minimum amount that is due. If you don’t, then you run the great risk of damaging your credit very early in the game. Consider your credit card the catalyst for proving your responsibility. Don’t run your credit card up to the limit unless it is absolutely necessary. If you do, then pay it back down as soon as possible. Holding a balance that is close to the limit can hurt your credit score.
Shop around and choose wisely when selecting which card you want to apply for. Apply only for the ones that you really believe you’ll be approved for. Watch out for extra fees or high annual percentage rates. Take advantage of special deals offered to students, but disregard them if they turn into high rates and high fees after the promotional period is over. Be responsible and always make your payments on time. Proving yourself now can lead to the best deals on major purchases in the future. If you do well and keep your credit score high, then you’ll enjoy special deals and the best interest rates for years to come. Your student credit card could be the start of your successful financial future.

About the Author: Mary Wallace, a retired teacher, is the editor for studentcreditcards.com, a provider of student credit cards and information plus consolidation of student credit cards. For more information, please visit http://www.studentcreditcards.com.

College Students and Money

We live in an increasing more material world. We have grown to expect instant gratification in every way. We no longer need to go to the bank and stand in line to get to our money. We wave tiny keychain devices in front of a receiver to pay for items at the store. Computers start up in no time and internet information is available on just about any subject that we can dream up in a snap. We don’t even have to walk to the mail box to pay a bill anymore. Remote controls, cell phones and MP3 players ensure that we can get where we need to go, talk to whomever we choose and listen to whatever we want in an instant. Our lives as Americans are full of conveniences and luxuries that our ancestors and people in other countries never dreamed of. So how does all of this convenience affect college students?
Current college students have spent their entire lives in this world of instant gratification and automated convenience. They have access to student credit cards to get them out of a bind, but credit cards can also get them into one. This is actually one convenience that can really help college students get by and help them prepare themselves for the future. Building your credit early is important in this day and age. Soon they’ll be out in the real world, needing to open cell phone contracts in their name, buy vehicles and ultimately buy a house. Keep in mind that most long-term big loan contracts, such as a home mortgage, can require up to an eight year good credit history to qualify. As long as they act responsibly, starting on a credit building financial journey while in college is necessary for those who will eventually buy a home.
Building credit can be accomplished if the right steps are taken. Signing up for a secured credit card is a relatively safe way to teach college students the responsibilities of owning a credit card. Secured credit cards require a deposit and the deposit dictates the amount of credit available. If you deposit $500, then you can spend up to $500. This is a great way to establish credit, or repair credit that has been damaged in the past. When you make your payments on time and when you are overall responsible for your finances, you will build your credit and you’ll usually be rewarded for your efforts. Banks and credit card companies keep track of your history and may offer you a line of unsecured credit or simply increase the amount that you are able to spend on that credit card. You will establish a credit score and be eligible for future loans and unsecured credit cards. Secured credit cards are a great way to teach college students about the discipline of paying off something long-term.
If they learn to avoid the instant gratification trap that they’ve been raised to expect and really only use the credit card for emergencies, then they will be better off in the future. Having a credit score and history that says good things about them will help them take pride in what they have learned and accomplished during their college years and will lay the groundwork for a successful financial life.

About the Author: Mary Wallace, a retired teacher, is the editor for studentcreditcards.com, a provider of student credit cards and information plus consolidation of student credit cards. For more information, please visit http://www.studentcreditcards.com

Tips for Students to Build Credit

Creating good credit and getting student credit cards is new territory for college students. Your future is starting now and you probably haven’t given much thought to building your credit. Getting off on the right foot is crucial for your financial future. Making the wrong moves can haunt you for years and you should be aware of the risks and rewards when it comes to your credit score.
Your credit score tells lenders if you are a low-risk person who manages their money and credit well, or if you are careless and reckless with your finances. If your credit is good, you’ll enjoy low interest rates on loans and credit cards, lower minimum payments than your peers and more lending options will be available to you. This can be very important when it comes to making major purchases such as vehicles or buying your first home. Making bad choices and careless uninformed decisions can lead to a life of high interest, high payments and simply not qualifying for that car or house that you need. The worse your credit gets, the more you pay for everything that needs financing. Trending in this direction can lead you on a downward spiral of out of control debt.
You may not know exactly where to start to ensure that you get the best deal and establish the best score possible. You are probably starting out with no credit score at all and applying for loans and credit cards can be disappointing when you are rejected again and again. Make wise choices. Don’t get a credit card just to go shopping or on a trip with your friends. Make sure that you really do have a necessity and don’t overcharge any more than you need.
When choosing a card, you may have some luck going through your bank or credit union, but there are companies that have special previsions for students. It is generally best to avoid companies that be preying on the fact that you seem naïve about credit cards. Beware of representatives that offer free t-shirts or any other types of prizes for filling out an application. That freebie could end up costing you hundreds or thousands of dollars in fees and interest in the long run. Look for good introductory rates that don’t balloon into something horrible after the promotion runs out. Compare interest rates, fees and terms of many cards before making a decision.
You may need to start out with a secured credit card. These are credit cards that require you to put money up front, use the card and prove that you are responsible enough to make payments on-time. Making on-time payments is one of the best pieces of advice you can get. Interest rates can fluctuate very quickly when a payment is missed. Fees are usually extremely high and you can get yourself into a bind that you can’t afford to get out of. Always pay more than the minimum required and pay off balances as quickly as possible. Show your responsibility to your credit card company and your credit score will reflect your diligence. Once you establish your good credit score, it will pay off for years to come.

About the Author: Mary Wallace, a retired teacher, is the editor for studentcreditcards.com, a provider of student credit cards and information plus consolidation of student credit cards. For more information, please visit http://www.studentcreditcards.com.