Student Credit Cards

Student Credit Cards are one of the first “adult” decisions high school graduates face as they leave their senior year. Each year as students graduate their mailboxes begin to bulge with credit card offers. The array of choices can leave students flustered and confused about their next move. The following are a couple tips to help students determine how to approach student credit cards and credit related financing, ie loans. Credit and loans are similar as they both produce debt.

To Apply or not to Apply
When considering a student credit card, first ask yourself this question – Do I need or want a credit card? If the answer is “want” you might reconsider applying. Need, however, is a different story. Truth be told, more then likely you “need” a credit card (as in one card). Student credit card offers are often “offered” to students on-campus - offering a free pizza in exchange for applying right then. It is not a good idea to apply until you yourself are ready. Many students seek a card designed specifically for college students and can help those new to the credit world build a solid credit history. Plus, it is always a nice reassurance to be able to have a safety net of credit in your pocket in case an emergency comes up (please note, purchasing that thing you have been dying to have does not constitute an emergency).

Interest Rate Riffraff
If you do decide you want a credit card, do not apply through the first credit card application you happen to get in the mail or with your college textbooks. Deciding on a credit card requires “shopping” for the best interest rate and terms. Credit card interest rates vary in a major way. Depending on your credit history and the type of card you apply for, you can get a credit card anywhere between seven percent and 36 percent. Credit unions sometimes offer lower rates. Visit the Government’s Credit Union website for more. Now obviously the lower the percentage rate, the better. When applying for a card, ask if your interest rate is fixed or if it can change. Most credit card companies will up your interest rate if you are late on a payment or go over your limit. An alternative to student credit cards is a lower interest private student loan - which in many cases often carry a lower interest rate than a credit card. The student loans are distributed each semester in a lump sum.

This is for college students looking for credit BUT wanting to take their credit futures seriously. Passages in these posts will touch on tips and resources to help build and manage credit wisely. If you already have a credit card and are looking for factual information on credit reports, visit the U.S. government’s page for information on free access to credit reports. College students without credit should compare and contrast each college student credit card before actually applying. Students without an income are urged not to consider a credit card. Carrying a credit card carries new financial responsibilities that must be met.