Student Credit Card 101

Student Credit Card – What You Need To Consider

For college students, a student credit card is a great way to introduce yourself to the world of credit. It might be slightly difficult to get a card if you’ve got no established credit history, but there are several things to keep in mind if you’re planning to apply that can help your chances of obtaining some credit.

Establish Credit Early

For young people and students, establishing credit early is key to building your credit history. The idea behind building a credit score is that if you use the money credit-card-for-studentsyou’ve borrowed responsibly, your score will reflect accordingly. The best way to do this is to pay your bill on time and keep your card balance low.

Building credit history is great for students in many respects, but it can be a great way to practice building good habits. Getting a credit card early is also a good idea because of how important the length of your credit history is to your score — it makes up 15 percent of your credit score. The fact is, the longer you have an account the better off your score will be.

Be Prepared

Before you go applying for a student credit card, make sure that you’re aware of the regulations and requirements attached to the card for which you’re applying. Too many applications at one time can negatively reflect your score, so you’ll want to make sure you’re in a position to be accepted for a card before applying.

Generally speaking, you have to be a student to get a student credit card. Aside from a few exceptions, most student card applications require you to enter your college information in the application process. Applying for a student card as a non-student can negatively impact your score, so make sure you’ve got the school information you need before you submit an application.

It’s also not uncommon for students with little or no credit history to need a cosigner on a card application, so you should have one prepared before you apply to increase your chances of approval. A cosigner is typically a family member, as that person is equally as liable for the debt as you are.

Know The Risks

As with anything you’re applying for or submitting personal information to, it’s important that you know the risks and look out for anything that might seem enticing but may not be the smartest financial decision. Student credit cards are one example of something that might come with some attractive bonuses, despite the fact that you could end up making a mistake in the end.

Let’s say you apply for a card because it comes with certain bonuses or rewards like a gift card or cash bonus. That might seem worthwhile, but that very card might have incredibly high interest rates — meaning that in the end, you could be paying much more than you owe. Stick to the lowest interest rates possible with credit cards and avoid getting sucked in to the world of rewards, as attractive as they might be.

Also make sure to review the annual fees, overlimit fees and other expenses attached to a card before applying, as these can add up and lead to you owing lots more than you spent in the long run. This, after all, is a common cause of debt — interest and charges adding up to more than you spent on your card.

In the end, if you keep your balances low, pay your bills on time and avoid bad cards, students and young people can benefit greatly in the long run from getting a student credit card.

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