Credit Card For Students
The Best Credit Card For Students Can Help To Establish Good Credit Ratings
A credit card for students is quite popular with students in high school, college, and university. Such a card is almost a necessity for many young people living far from home.
Credit cards for teens work very much like traditional credit cards, but they come with features and restrictions designed for a student's needs.
RestrictionsSince few students own property or posses an established credit history, most card companies charge higher interest rates on student balances. Spending limits are also set considerably lower than other cards and range from $500 to $1000.
Because of the higher lending risks, student credit card approval can be difficult to get. That's why some credit card companies insist that with a credit card for students, the parent or guardian acts as the cosigner. The cosigner is held 100% responsible for ALL unpaid debts that the student might acquire through use of the card. If a debt remains unpaid, it's the cosigner's credit score that's damaged, not the student's.
Parents should NEVER cosign for a student without careful consideration. Not only could you lose your hard-earned money along with your credit rating if the student is irresponsible with his or her spending, but you could also risk damaging your relationship with your child should a financial problem ever arise. Money problems can and do cause painful divisions within families. You must decide if it's a risk worth taking.
It there is ANY concern that the card will be misused, consider getting either a "prepaid credit card" or a "prepaid gift credit card" as a good alternative. Both types of cards offer the convenience of a credit card yet carry little or no risk.
Choosing The Best Prepaid Credit Card
Choosing Prepaid Gift Credit Cards
AdvantagesAside from the mentioned risks involved, a credit card for students has its advantages. Such a card can be very convenient in emergency situations for out-of-town students when ready cash is not at hand. It can also free the student from having to carry around large amounts of cash for major purchases, and it provides an itemized monthly statement of expenditures.
When used responsibly, a credit card for students can do much to establish a good credit rating. Sooner or later, the student will graduate and need to rent an apartment, take out a car loan, or finance a mortgage on a house, and the wise use of a credit card now can lead to true financial independence. A proven credit history will be a great help to the student later.
How To Use A Credit Card For StudentsA ready source of credit is convenient for the student, but there are potential pitfalls that young people should be aware of. As the old saying goes, to be forewarned is to be forearmed.
The student is wise to prepare an affordable budget; it's his or her best protection against the temptations of impulse buying and overspending. College student budgeting affords a real-world perspective on cash flow and helps the student to stay within their spending limits.
Money budgeting is a learned skill that can pay huge dividends throughout one's lifetime. Having a proper budget is highly recommended.
My wise Dad used to say, "If you don't need it, don't buy it!" This is only common sense, and I had to learn it the hard way; but a student credit card has the power to offer instant gratification: extra-large pizzas, designer jeans, a brand-new iPod, or perhaps a night on the town with friends.
You convince yourself, "I'll get it now; I can always pay my card off at the end of the month." Resist such thoughts! If something unexpected arises, and it usually does, you will be unable to meet your payment obligation, and your debt will keep growing.
Buy only what you need and stay within your budget.
If a credit card for students is used in a responsible manner, it will serve you well and become one of your keys to financial freedom. Misuse it and it will quickly enslave you.
The best student credit card is one that's used moderately and responsibly.
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