Every young student going off to college wants the liberty of having their own credit card. What a great privilege it is, and sometimes, it could even be a great gift idea for a student, too. If you are in the process of choosing your first student credit card, or helping that special student of yours get their own card, before you start looking, some things should be considered - both about the young person, and about the types of cards available.
A Word About You
If you are a young person looking to get your very first credit card, then listen for a moment to a couple of things. A credit card can be a blessing or a curse -- all depending on how you use it - and on who is footing the bill. Regardless of what you do with that credit card, the world is watching, and if you overcharge it, make late payments on it, or whatever, it will go toward your credit rating and affect it for years to come. When you get ready to buy that car, or those electronics, or clothes, it can affect that, too. Learn the proper use of finances and how to best use a card. The Internet would be a good place to pick up on this information if you do not already know it. Just by typing in the words "student credit card" you will find many Webs sites that can instruct you on how to best use it.
A Word About The Cards
Here are some things to look for when you want to get that special student credit card.
? The APR
This is the amount of interest that will be added to your student credit cards each month, and it will vary with each card. The best is 0% APR. Unless you have a good job and an excellent credit history already established, it might be difficult to get this kind of card. You need to note just how long of a time this introductory rate applies to the particular college student credit card. For most, it is about a year, but with some it is only good for three months. After that time frame, there is a standard interest level.
? The Cash Back Rewards
Many credit cards will now give some sort of incentive to get their card. Usually, it is somewhere between a 1 and 5% return on a specific type of purchase. Often there is one level of rebate given on groceries, medicines, and gas, and a different percentage on general purchases, and then another percentage given if you shop at certain stores. These student credit cards work out great for gas purchases, and other things. Some cards will give you air miles for your purchases, and that could be a good way to save money for flying home during the summer, or holidays. The benefit, however, pretty much ends if your payments are late, or if the card is not paid in full each month. These cards normally charge a little higher percentage in interest, and the benefits may not outweigh the losses.
? The Annual Fee
Most cards do not carry an annual fee, but enough of them do to make a note of it here. This fee can vary anywhere between $15 and go up to $135 per year. Some college student credit cards may waive this fee for the first year, but charge it later. Student credit cards are a great idea in that they also can prevent you from needing to have a lot of cash in the dorm. It gives you an added safety feature - and a good record of your purchases, too, so you can see where the money is going.
At almost all colleges and universities these days, there is a ready supply of college student credit cards. But the sad fact is that most students going off to school in today's world do not understand how to handle financial responsibilities like having a credit card. In the past when they wanted money for something, they either called and begged you for it or they earned it from a part time job they were doing. But outside of you perhaps keeping track of those loans in a notebook, they do not have experience with real credit cards.
You should consider getting a college student credit card for your child when they go off to school. If you have already gone through the financial pain of having had a child in college before, you understand what I am referring to ? you can plan and budget for hours at a time, but there is always something else that the school is holding out their hands to be paid for, whether a text book, a study guide, a parking permit, etc. Think about it, you are sending your son or daughter to college to be educated and learn, not to be stressed about trying to
figure out how to pay for this new expense that they had not budgeted for, which seems to hit them at least every week if not every day. There are also certain distinct advantages to getting a college student credit card for your son or daughter. In addition to the lack of stress about those unexpected expenses that are almost certainly going to pop up, they will be learning about fiscal responsibility. Up to this point in their young lives, the possibility is great that you just did not take the time to teach them about ?Basic Finance 101? in terms of having a credit card and taking responsibility for it every month. Who has the time? You and your spouse are probably both working full time in today's world to make ends meet. When your child is in high school, with all the meetings and practices and club gathering and studying, there was precious little time left over for other stuff. Do not berate yourself about that, that is just the way it is in most households in today's world, and the vast majority of students are in the same boat.
You want to provide for your child every opportunity and advantage that they could have when they have graduated from college, and this is normal. So why not get them a college student credit card so they will have also learned about financial responsibility, since after graduation, they will likely be stressing out about finding a place to live, finding the right new job, making tough decisions about their social life, and so much more. If they have had a college student credit card while in school, they will have learned about the responsibilities that accompany having such a card, like how even minute charges add up at the end of the month, the magic of how much interest can accumulate if they do not pay the balance in full, and perhaps even the embarrassing phone calls from the card issuer when they are overdue with a payment. This is a part of the overall education process as they become acclimated to the real world, and something they need to learn as it will be a part of their world for the rest of their life.
Be careful when establishing a credit limit on that college student credit card. Most card issuers will not give them a huge credit limit, but it should not exceed a few hundred dollars, just enough to cover the incidentals that you did not plan for. You cannot allow the student to be tempted by the aspect of ?free money? from a cash advance on their credit card when they are considering a spring break trip to Florida, which is yet another reason to keep the credit limit reasonably low.
You should know that the interest rate that will be assessed on the college student credit card will reflect the fact that the card issuer is taking a chance. A college student typically does not have experience with credit card responsibilities, so the interest is going to be reflective of that risk. But after 6 to 12 consecutive months of timely payments where the minimum due or more has been paid, the student is now in an excellent position to request a reduction in the interest rate, or to shop for a different college student credit card.
Both Robert Alan & Jon A 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.
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