What To Look For In A Student Credit Card

Students may typically find it difficult to get approved for a standard credit card. Thankfully for students in colleges, credit card companies offer student credit cards as well. In fact credit card companies like to make their customers when still in college. Credit card companies like students because they know that their parents stand behind their credit card debt and stay also stands to win lifelong loyalty by making them there are clients while still young.

According to the new credit card rules and regulations in the credit card act 2009, no person below the age of 21 can sign up for a credit card unless they demonstrate a source of income or have another person as a cosigner who can show himself to be a stable guarantor in case the primary holder happens to default.

It is important to choose the right student credit cards yourself as many such offers can be found from many major credit card providers. How to choose the perfect student credit card for your needs? The best student credit card should offer features like:

  • An introductory interest rate of 0% APR.
  • A low interest rate when the introductory rate expires.
  • Fraud protection for fraudulent transactions and loss of credit card.
  • 24 a customer service to help with problems regarding Bill or credit card use.
  • Specific usage rewards such as airline miles, reward points, cash back and merchandise gifts.
  • A manageable credit limit.
  • Notification by SMS/email/phone of credit limit, card balance, bill payment date.

Student credit cards should typically offer the ability to be approved without having an extensive credit history. This is what makes student credit cards specialized credit cards. The students who have not had a chance to establish a credit history or even have a bad credit history should be able to take advantage of a student credit card. A student credit card usually has a limited credit limit which is a good thing because it will help to keep your purchases and debt under control. Certain student credit cards require the students to provide proof of stable source of income.

While you may find that it is not so difficult to qualify for a student credit card, using one carefully and responsibly is important. Research has shown that a majority of students are thousands of dollars credit card debt by the time they pass from college. You should avoid this kind of financial situation by avoiding indiscriminate spending on your student credit card.

Use the credit card to provide you with the benefits and advantages that come this financial tool. Using a student credit cards to build credit history while still in college makes many things a lot easier to you such as finding an apartment, applying for a car loan when you pass out.

Student credit cards are available from several major credit card lenders today. You should look around and shop for the best student credit cards that match your requirements. Student credit cards are available that offer double reward points, unlimited cash back the ability to one money for keeping a specific GPA and more.

New Credit Card Regulations for Teenagers to Get A Credit Card

The Credit Card Accountability Responsibility and Disclosure Act is a new law that comes into effect on February 22, 2010. This law changes certain rules and conditions about credit cards obtaining to teenagers below 21 years of age. It has been estimated that an average College student carries a debt of $3000 on their credit card. A steady is also estimated that some freshman students and College graduates will end up with more than $8000 on the credit card when they leave college.

Here are the certain rules and regulations that have been brought about by the Credit Card Accountability Responsibility and Disclosure Act Of 2010.

No Approval over Telephone

This rule means that a credit card cannot be approved for a person under the age of 21 over the telephone. Everyone under the age of 21 must write a written application for a credit card.

Teenagers Must Prove Income or Have a Cosigner

Not only do teenage is required to put an application for a credit card in writing but they must also present proof of income or have a cosigner who is offered legally adult age above 21 and someone who can take responsibility for making the payment on the credit card on the behalf of the teenager. Such a cosigner can be a parent, guardian, spouse, aunt, cousin etc.

The credit card issuers are required to take a written approval from a cosigner on the credit card that has been co-signed. This allows a cosigner is to lower the credit limit to prevent high balances.

Restrictions on Campus Credit Card Marketing

Credit card companies are known to target fresh College students for their credit cards by advertising and marketing themselves on a close to college campuses. Credit card companies love to recruit new student is as their customers is not only do they stand the chance to win a loyal customer for a lifetime but also consider them to be safe risk since parents usually stand behind their debts.

They use naive yet simple practices such as offering T-shirts, sandwiches and simple free gifts in order to make the College students signed the credit card application.

The new credit card rules make this practice illegal. Credit card companies cannot offer any tangible item to entice students to apply for credit cards on the campus, near campus or at a College related or College sponsored event. Credit card companies are also not allowed to send preapproved credit card offers to consumers under the age of 21 unless the person has opted to see these offers.

How A Parent Should Handle Credit Card Usage for Underage Children

What a parent should know and do to guide their underage children with credit card usage.

Parents are the first frontier when it come to Teaching their children about safe credit cards usage. Credit cards amongst youngsters are more common with college students rather than teenagers in high school. However researchers estimated that almost 2% of high school seniors don’t have credit cards.

The recent credit card laws and regulations have restrictions on anyone under the age of 21 having a credit card without having a cosigner on the account as well. This cosigner is usually the parent or someone who can prove to be a stable guarantee for making payment on the credit card.

Nevertheless, it is a fact that high school students are supposed to spend more than $200 billion annually. More and more teenagers and youngsters hanker for their own credit card because it has become a part of the paraphernalia that a teenager is supposed to have one in order to be cool and to fit in. And in many circumstances, parents to give in.

Sometimes patients give their children a credit card as an emergency resource.

About half of the students have a credit card in their own names while the others use cards issued in the parent’s name.

It is a fact that college students get bombarded with credit card offers as they make really good potential customers. Not only do youngsters and students have parents standing behind them to back up their debt but they also have the potential of becoming loyal customers.

All this makes it extremely important that parents take an active role in the credit management and credit spending of the children. The approach that the parent needs to take will probably be very different for a teenager who was in high school and for a child who has gone to college. A parent can control the credit usage of the children in high school more strictly than an offspring who has gone to an out of town college to study. Children who are still in high school should be told clearly that they can only use the credit card for a transaction that has been preapproval by the parent.

Educating Young Teenagers on Credit Card Usage

  • Careful thought should be given to giving a card to a teenager in the 1st place. There is no need to give in to the demand for credit card prior child simply because he or she feels the peer pressure. The basic need to give your teenager charged the credit card stem from providing an emergency resource and a safeguard.
  • Even if you are giving your teenage child credit card in hope of building credit history and allowing him or her to use a credit card for some regular purchase and shopping transactions need to be pre-approved and limited by you.

Handling Credit Card Usage For College Going Children

When it comes to helping a child who has gone to college and let credit card, a different approach may be required. You cannot exert as much trouble over the direct spending of the child who has gone to an out-of-town college. However, since you are likely to be a cosigner on the credit card account, you can keep a check on the credit card usage. Any sign of your college going child overextending credit usage should be discussed at the earliest. You should encourage your child to discuss any financial need or requirement with you 1st. You should also encourage him or her to come to you immediately in case they do happen to get in of that that situation with their student credit card without you being aware of it.

At the end of the day, you have to expect that you may not be able to control or dictate how your child in college uses the credit card. Specially, if he or she happens to be over the age of 21 and does not have the as the course of the credit card account. The best that you can do in this situation is to be aware of the repercussions of a responsible uses of credit.

You need to educate and inform your child about the best ways to use credit card which are:

  1. Restrict credit card usage to essential order emergency need.
  2. Not to revolve a large balance on the student credit card.
  3. Charge the credit card only with the amounts that they can afford to be back in full every month.
  4. Do not encourage friends use the student credit card, specially if the reason is that they cannot afford the purchase.
  5. Restrict credit card usage till they have an income of their own.
  6. Do not subscribe to more than one or maximum 2 credit cards when still in college. A couple of student credit cards are more than enough to suffice their needs.
  7. Tell them about the importance of staying debt-free in life, or at least not undertake debt they do not have the money to pay back.
  8. Benefits of using credit only as a financial tool to make your assets and financial worth grow.
  9. Choose a student credit card carefully choose the features that best suit a student such as the wine will be, low interest rate, reward points, low credit limit, e-mail and SMS notification for timely payment, credit card balance and reminders of credit limit.

At the end of the day maintain a clear and open line of communication with your children. It will off set and fore guard against any future financial problems. It is important to get yourself educated on credit matters, when your children cannot be relied on to do it themselves, so that you can guide them effectively. They can learn from your mistakes and you can make sure that they do repeat them.

How to Choose a Student Credit Card

As a student you are probably best face-to-face with a lot of credit card offers especially if you’re going to college. Credit card companies love College students since not only do they gain a customer earlier on much can also rely on the parents of the student paying off any credit card debt that’s the student gets under. Choosing your first credit card as a student is an important enterprise. You should choose a credit card carefully and not go in for the first offer that comes across you. It is an exciting time and moment to pick out your first credit card but you must keep the following points in mind to make sure that you make the right choice.

Having a limited credit history. Typically a person who had a limited credit history finds it difficult to be approved for a credit card. This might or might not hold true in your case if you’re a College student. However make sure that the lender you are dealing with is not find to compensate for the fact that you have a limited credit history by offering your credit card that has a high interest rate. Deal with the credit card provider that these commonly and often with students and people of limited credit history.

A few things to keep in mind when choosing a student credit card

What Is the Credit Limit on Your Student Credit Card

ideally as a student you want to choose a credit card with a low credit limit. What you want to do initially is to learn proper credit card management rather than be tempted to make a huge balance on your credit card that will put you under a burden of debt even before you have finished your education.

What Is the Interest Rate Being Offered on the Student Credit Card

if you intend to use your credit card from making purchases for school or college staff such as books and equipment then it is likely that you may want to rotate your balance from one month another and pay off the expense gradually. Ideally as a student he would a credit card that offers a very reasonable and low rate of interest that allows you to use your credit card for your maximum benefit.

What Are the Extra Fees and Charges Associated with the Student Credit Card

As a student you ideally want a credit card that has the minimum amount of extra fees and charges such as animal feed, processing fee and even an account maintenance fee. While all credit cards can have a normal feel like late payment fee and over the credit limit fee avoid a credit card that has strange and uncommon charges. usually a credit card company will revert the animal charges and Even the interest for the 1st 6 months or even a full year. However, be aware of what interest rate and no charges will be levied on your credit card after the promotional is over. It is not uncommon for student credit cards to have annual charges ranging from $0 and $50. Also the interest rate on student credit cards tends to be higher than conventional in credit cards. If you happen to revolve the balance on your credit card, something which is not advisable, the interest rate on your credit card could make a huge difference in the total amount that you have to pay back on your credit card bill.

Get a Student Credit Card Without a Cosigner

It may be tempting to get a credit card more easily simply by having a parent or Guardian cosigning due on the credit card application. However, try and take on a credit card as a single account holder as that will help teach you need more responsible birds credit payment and management.The new credit card rules and regulations under the credit CARD act 2009 dictate that if you are below the age of 21, you either need to have a cosigner on your credit card application or if you need to prove a source of income.

Choosing a Student Credit Card with  Rewards and Points

It is good to find a student credit card that has rewards on it. Having a credit card offer rewards back to the student will using it is an added benefit. However that should not be the first criteria future is your credit card. If you are getting a good deal with a credit card on the interest rate and the credit limit then he should go for it. Rewards can also tempt a student to make unnecessary purchases from purpose of running the rewards. This practice can make you spend more than you can afford to which might not be worth the rewards that you earn in the end. For example, Capital One Venture Rewards credit card offers reward you with flying miles for every purchase you make. Moreover, these reward flying miles do not expire and can be used on any airline without any blackout dates.

 

Why Credit Card Companies Target College Students

As a college student you will probably quickly discover that credit card companies are extremely eager to hand out credit cards to students. Many stipulations and credit requirements such as proof of income, good credit score, good credit history are all bypassed when it comes to approving a college student for a credit card. This is not surprising because the credit card companies know something that you do not. They are making a smart and clever decision by targeting college students to sign up for credit cards even though they may seemingly be a bad credit risk.

Credit companies know that college students are better credit risk than most consumers.

Credit card companies find it easy to rope in college students. They offer freebies like free T-shirts etc. just to get the student interested. Many students sign-on just to get their hands on the freebies thinking that they will never ever use the card anyway. But this seldom happens.

Things have changes in the recent past though.

New credit card regulations of the Credit CARD Act, 2009 prohibit any company or bank to offer freebies like t-shirts, free pizzas etc. within 1000 ft of a college campus as a reward for signing up for a credit card. However, you may still find these companies at the nearest hang out joint.

Being in college means that the situation will arise when using the card will seem like an extremely good idea. It may be a birthday celebration bash or a road trip. Some students even used a credit card to pay for college tuition. Where and when you use it does not really matter. The point is that the credit card companies know this even before you do. They know that once they make you sign up, you are going to use the credit card.

2 key reasons why credit card companies like to sign up college students for their credit cards.

  • A report by Sallie Mae reveals that an average student is likely to have about four credit cards with a balance of $3000 in total. Another report suggests that one out of four students will have a debt of $5,000 when he leaves college. You do not want to be in either of these situations. So it is a fact that college students use credit cards and pay a lot as interest.
  • Not only to the credit card companies realize that catching a consumer young may result in many many years of brand loyalty with thousands of dollars paid in terms of interest and financial charges, but also the fact that in most of the cases the parents will bail out their children in the situation of an unpaid credit debt.

A credit card is an important tool while you’re in college. Not only is it a resource for urgent needs an important expenditure, it is also an excellent way to build up your credit history and your credit score even before you are out of college. Having a good credit score when you leave college will make things a lot easier for you. You will find that your credit report is of a great deal of importance when it comes to finding a house on rent, buying your first car, applying for a loan or even getting your first job. Choose your credit card wisely. Shop around and be clear in your mind as to what you want your credit card for. Desired features in a credit card or low interest rate and finance charges, interest-free installment payment ability, no annual fee etc.

When you first set out to go to college you should be wary of the credit card offers that are thrown in your face in and around the campus. If you feel that you need a credit card in college it is better to take one beforehand from the bank that you have an account with or your parents’ bank. Many laws in states like California, Texas, Oklahoma and New York have rules that restrict credit card companies from marketing themselves on campus. If you are in a state where these laws do not exist and you are being exposed to these kind of offers then you need to exercise caution.

Find your own credit card that provides the services that you require.

5 Tips For Clever Use of Student Credit Cards

These are some tips that colleges students can use to use credit cards wisely and not get themselves head over heels in debt. Since credit cards are probably the commonest kind of credit that a college student uses, apart from student loans, controlling the credit card spending can be the difference that makes breaks your credit score. It is not uncommon for students to have a large debt in their credit cards by the time they pass out of college.

  • An independent study has shown that the average balance on a student credit card is more than $2300.
  • If you are someone who is going to carry this balance and/or make minimum only payment for a long time, you are going to be paying a lot more as interest to the bank.
  • Remember, your student credit card probably has a higher interest rate than a regular credit card.
  1. Choose the credit card wisely – Do not take a student credit card just because they offer a free T-shirt or any other freebie with a card. Take the card if it offers you the kind of services that you want. Sought after features on a credit card for a student can be low interest rate, ability to break down purchases into interest-free installments, no annual fee etc. Under the new credit card rules, no bank or other credit card company may offer promotions like freebies mentioned above within 1000 ft. of the school campus. This does not meant that you may still not come head on with such offers. You may find it happening outside the eating joint or theatre or any other place close to the college campus where the students tend to hang out.
  2. Keep the number of cards to minimumAvoid signing up for a student credit card just because it happens to come your way. While you are still in college one credit card should be sufficient for your needs. Even after college one or two credit cards serve the needs of most of the individuals. Every additional credit application for a new credit card can affect your credit score adversely. Worse, more credit cards give you more freedom to charge more during your student years when do not have an income or a limited one. If you are like most american college students, you still have a student loan to repay. Do not add to this debt. There is going to be plenty of occasions to use a credit card when you have a job and money to pay it off. Do not get yourself in a bad debt situation at the start of your life. It is never a good idea.

  3. Charged What You Can Pay offThe idea should be to charge your student credit card only the amount of money that you can pay off in full every month. Charging the credit card for a large sum of money and counting on paying the minimum every month can result in a prolonged debt where a large portion of the money that you pay will go towards interest and financial charges. While you’re still trying to repay the existing balance, you will be unable to use a credit card for an urgent need that may arise at any time. 
    This defeats one of the few positive purpose of a student credit card.
    Many students tend to use their credit cards to pay for college tuition. Have you considered other sources for finance to pay for college expense? Federal student loans and even loans from private banks cost much less as compared to the whopping 18%-25% on student credit cards.
    Another important thing here is that it is a good policy to maintain the balance below 30% of your total credit limit on your credit card. This habit will benefit your credit score the most.

  4. Use credit cards for what you need — Many students treat their first credit card as free money. Although more and more students are realizing the importance of managing their student credit cards responsibly, the impulse to use a credit card for non-essential buys is still strong. Remember, you do not have an income to pay back the debt. If you have an understanding with your parents as to how much you can charge on your credit card for leisure, with them funding the purchase, then no problem. Other wise differentiate between what you want and what you need.

    Making an impulsive purchase on your credit card when you can’t afford it can result in you paying three to five times the amount of purchase. If you cannot afford the purchase and the likelihood is that you will end up revolving it from one month to another by making minimum payments. This will take a large chunk of the money that you paid towards the interest and the financial charges. You will also end up blocking your credit card for any other urgent use that might come your way. Unless you are a very organized person who uses credit card like cash and pace of the bill every month use the credit card on the case of emergency and need.

  5. Do Not Encourage Others to Use Your Credit Card — even if the person asking to use your credit card is a friend, do not encourage this practice. If your friend is asking to use your credit card because he cannot afford the purchase at that point of time than there is also a chance that he may not be able to pay you back when the time comes for your credit card payment. This may result in a late payment which will be reported on your credit report. The report of a late payment stays on the credit report for a period of seven years. This could be damaging to your credit score and a very negative mark for future lenders and other people who look at your credit report. Providing an explanation that it was not you who had made the charge on the credit card but a friend will only make you look like an irresponsible person who does not know how to handle credit cards.

Pay attention to these steps to make sure that you come out of college with an unblemished credit report and unscathed from your experience with creditors and credit card companies.