The main topic of this talk should be centered on the high degree of probability that your child will receive numerous offerings for credit cards while they are at school. Credit card issuers have long known that college campuses are fertile ground for picking up new accounts.
Parents have long known that when children get to college age they want to exhibit some form of independence. This desire to be independent, coupled with these numerous offers for credit cards is where the trouble can begin.
The best way to keep your child from becoming loaded with credit card debt is to teach him or her about money and about credit before they get into trouble. It is important that you tell them about the way lenders can act sometimes, and that receiving numerous offers for credit cards does not mean they have to apply for each one. Some college students end up with a dozen cards and then the temptation to use those cards kicks in. Within a very short time, many of students have maxed out their cards and are faced with incredibly high payments at the end of each month.
The truth is many students have to drop out of school in order to go to work full time in order to make these payments. That is certainly not what most parents anticipate for their college bound children.
When you talk with your child make sure you go into the some practices that are being used by credit card marketers. It is not uncommon for these people to use offers of free merchandise or other promotional offers to entice students to fill out credit card applications. Some students are asked to fill out the cards and told that they can simply cancel the card later. This may be true but they rarely tell the student that canceling cards can be a negative entry on their credit score.
In the past, many credit card issuers would set up tables in dining halls or other places where students gather. This made the temptation to fill out an application form even more intense. Some schools have since curtailed the number of places that these tables can be set up, but do not assume that the college your child will be attending has done this. Let your child know that they are under no obligation to sign up for a credit card from anyone. Ensure that they know that just because their friends are doing it does not mean they have to do it as well.
Many parents have found it safer to get the student a credit card before he or she leaves for school with the caveat that the card is to be used for certain things and not to be used for other things. When you explain to your child that one credit card is enough to handle most circumstances, they often understand the reasoning behind your not wanting them to get more cards.
Lastly, one good way to show your child how a credit card works is to show them one of your current statements. Explain to them that a credit card is just that credit. This money has to be paid back and often it has to be paid back with interest. Explain to them what a credit report is and what a credit score is and how important it is that they not get into credit trouble this early in their life. Your talk can save them years of financial turmoil.
1. Reasonable Interest Rates
The companies that offer the best student credit cards firmly understand that a student isn't going to have a long-established credit history, and they are not going to penalize you because of it. A good student credit card will offer a reasonable interest rate (15-percent or less), regardless of this fact.
2. Sensible Credit Limits
Whether you realize it or not, you do not need a $5,000 credit limit while you're in college. Remember, student credit cards should not be used to finance your college education -- that's what student loans are for. Student credit cards should really be kept for emergency purposes or budgetary reasons only.
The best student credit cards offer sensible credit limits (less than $1,000) and will have a limit of one credit card per student. If a credit card company is willing to give you a credit limit of thousands of dollars, it's just setting you up for trouble.
3. Rational Grace Periods
A grace period is the period of time from when your credit card billing statement closes to when the payment is due. Unfortunately, during recent years, some credit card companies have employed the less-than-ethical practice of all but eliminating the grace period. Some consumers have even reported receiving their credit card statement days after the payment was due!
The best student credit cards will offer a grace period of at least 20 days, meaning 20 days will elapse from the time the billing statement closes and the bill is sent to the time that the payment needs to be received.
4. Forego the Temptation
Long-time credit card users know all too well that their monthly credit card statements also arrive with offers for special deals and purchases (such as magazine subscriptions or interesting collectibles). The best student credit cards will not bombard you with frivilous impulse purchase offers.
Credit card companies need to take some responsibility for teaching you about responsible spending and the best student credit cards adhere to this philosophy.
5. Pay For What?
Some student credit cards require an application and/or processing fee. However, the credit cards that require these are never the best student credit cards available.
The best student credit cards keep fees to a minimum (foregoing the application fees, processing fees and annual fees) and usually only charge fees for late payments and/or over-the-limit transactions.
6. Online Account Management
Another thing that the best student credit cards have in common is online account management. With online account management, you can review your credit limit, make payments and keep track of your spending right from your dorm room.
While online account management used to be a "novelty," it is quickly becoming a "must have" and all of the best student credit cards offer it.
7. Rewards Aren't Just For Adults
Rewards credit cards aren't just for mom and dad. Students are eligible too. Some of the best student credit cards offer rewards, such as points that can be redeemed for gift certificates or even cash back.
Just remember, student credit cards that do offer rewards usually also have a higher interest rates (16 to 19 percent). Because of this, it's important that you pay your balance in full each and every month to avoid finance charges if you opt for a rewards credit card rather than a low-interest credit card.
8. Don't Overlook the Credit Union
Some of the best student credit cards can be found at the credit unions on college campuses. Many college credit unions offer student credit cards with very competitive interest rates and other student benefits. If you haven't done so yet, check your campus credit union to see what they have to offer.
9. Nurturing Your Credit History
The best student credit cards will report all payments made on the card to the three credit reporting agencies. Pre-paid student credit cards do not do this, which is why they aren't really good for building your credit rating, nor are they beneficial for teaching you about how revolving credit works.
When applying for student credit cards, make sure that they are legitimate credit cards (not pre-paid deals) and that all account of your activity is reported to the credit bureaus. When you graduate from college and need to buy a car or a house, you'll be glad you did.
10. They Really Are Student Credit Cards
The best student credit cards really are just what they say they are -- student credit cards. Some credit cards advertise themselves as being student credit cards when, in fact, they issue students the same credit cards they issue everyone else.
Because students have unique financial circumstances and needs, you need to apply for a student credit card that is what it says it is. Unless the card you are applying for is specifically tailored to students, it's not really a student credit card.
Remember, even though the world of student credit cards can be confusing and finding the best student credit cards can feel like a daunting task, these ten priceless bits of advice will get you well on your way to a sound and stable credit card future.
Both Peter Kenny & Max Anderson are contributors for EditorialToday. The above articles have been edited for relevancy and timeliness. All write-ups, reviews, tips and guides published by EditorialToday.com and its partners or affiliates are for informational purposes only. They should not be used for any legal or any other type of advice. We do not endorse any author, contributor, writer or article posted by our team.
Peter Kenny has sinced written about articles on various topics from Credit Cards, Finances and Best Money Market. Peter Kenny is a writer for The Thrifty Scot, please visit us at and. Peter Kenny's top article generates over 368000 views. to your Favourites.
Max Anderson has sinced written about articles on various topics from Credit Card Offers, Credit Cards and Business Credit Cards. For more tips on getting the saving money and avoiding getting taken, check out CreditCardTipsEtc.com, a website th. Max Anderson's top article generates over 49500 views. to your Favourites.