College Credit Cards – Are They Useful?

Students normally do not qualify for regular credit cards, because they usually do not have a credit history or source of steady income, This is why they need college credit cards, which help students establish a positive credit history early on, thus enabling them to qualify for regular credit cards in the future, even without employment. College credit cards are similar to normal credit cards in most aspects; they differ in that they are designed for students and come with more conditions and restrictions. The restrictions include higher interest rates, lower credit limits, and the need for a college credit cards co-signature from a parent or guardian. Read more here.
Students need to understand that they need to have a great credit score. Good credit enables you to buy your first home, car, or cell phone and plan. However, when students do not take care of their financial obligations they will end up in huge debt, with bad credit. College students should understand how late payments damage their financial lives. Some of these hassles can be avoided by reading the fine print carefully so that you will know the penalties and minimum fees. These things may look appealing, but students need to be aware of the dangers that come with late payments.

College Credit Cards—Advantages for Students:

– Flexibility. Most students will enjoy the flexibility that comes with the use of college credit cards and get huge savings in the long run.
– Discounts. Students who get decent grades may be eligible for discounts with their credit card companies or even lower interest rates. Many of these credit cards are full of benefits and rewards.
– Financial management. Students learn how to manage their finances at a young age. Some credit cards can be made pre-paid, thus students will avoid overspending. Moreover, their parents will be able to oversee their financial behavior.
– No annual fees. Some college cards do not charge annual fees for at least the first year.
– 0% Annual percentage rate (APR). Often there is a 0% APR fee for the first 6 months on both balances transfers and purchases.
– Big banks. Chase, Discover, and Citibank offer these types of credit cards as well.
– No cash. Students can use there credit cards and avoid the problems of carrying cash.
– Internet payments. Students will be able to pay over the internet without hassle.
– Pay for emergencies. Students sometimes have to face emergencies, while in college. They will be able to use their credit cards to help resolve them. Click here to read more.

Cons of College Credit Cards
– Overcharges. Students with delayed payments will have to pay substantial over charges. Payments need to be made on time, in order to keep your credit score in good standing.
– Overspending. It is important to avoid overspending and getting trapped inside a debt burden for a number of years after graduation.
– Credit score issues. Your credit score will have a negative impact, if you do not pay your college credit card on time.
– Annual fees. Many college credit cards charge annual fees and students need to be aware of this fact.

Student Loans Vs. Student Credit Cards
Students are able to use student loans to pay their cards off after graduation. One of the advantages of student loans is that they come with fixed interest rates. Students need to know that student loans often offer lower rates than most student credit cards. One of the drawbacks of student loans is that students will have to wait until college credit cards to start building their credit scores.
Student Credit Cards Myths
– Building credit. These types of cards are not the only method for students to establish credit. Secured credit cards are available in many banks and only require a cash deposit as collateral.
– Students do not need permission. Students need one of their parents as a co-signer; this is required by state law.
– Big banks offer the best deals. Many small banks have great credit cards for students.
You have learned a lot of new and interesting things about credit cards for students. Be aware of the fact that there are many dangers associated with this type of card, but there are also many benefits and rewards. We have also talked about myths and how student loans are great alternatives to student credit cards.

Category: College Credit Cards

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