As soon as your child begins college, he will start considering himself as an adult and will be given the opportunity to take some major decisions himself. First of all he will be bombarded with all types of offers and deals including credit card offers that may be of interest to him.
Most of the major credit card companies give away these offers that provide a slightly different package than mainstream credit cards. But the use of these cards is the same. Your student can use the cards for a wide variety of expenses and possibly even earn rewards or cash back bonuses.
Facilities offered by Student Credit Cards
There can be many differences between the cards that are designated for students and those that are sought by others, depending on the issuer. Some of the differences include:
- The interest rates are often lower.
- Mostly, there is no minimum income.
- Most of the cards don’t require a cosigner either.
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There is rarely any annual fee.
- It is fairly easy to get these cards, given that your student hasn’t encountered any troubles with credit before.
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At first, the credit limit may be lower than a regular credit card. But the limit will usually rise accordingly, once the student has established himself or herself as a responsible creditor.
It is not difficult for any student to find such credit cards. Credit card company representatives often appear on college campuses, particularly at the start of each semester, and offer “freebies” or other incentives if the student simply applies. Basically, this is what causes problems for most of the students. Many students who have never had credit before, often apply for more than one card, get approved for more than one card, and quickly find themselves in debt. Also, most of the students go for what they are getting readily before comparing the different rates or offers.
Tips for Students
In this way a student may fall into debt even before graduating college, but it’s fairly common. You can give your child some of these tips for using a student credit card if he is heading off to college.
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Use the card only for to get basic necessities, not for party supplies or dining out.
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Pay the bill in full each month (you might want to observe your child’s bills for a few months to make sure your student is being responsible)
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Guide them about the different interest rates and remind them that if they pay the bill late, they might have to pay a higher interest rate
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Try to discourage them from applying for credit cards simply because of the free gifts attached.
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You should teach your child some basics of good money management.
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Educate the about the credit history and how it can affect their future life.
Advantages of Student Credit Cards
After understanding all the precautions, if your student is willing to handle the credit card responsibly or you plan to pay the bill, then don’t be afraid to do so as there are many advantages of a student credit card as well. The advantages include:
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The lower interest rates can lead to slightly lower payments if you must revolve the balance for a month or more.
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The students can get a sense of independence and responsibility by getting their own credit card.
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It gives students the opportunity to develop good credit habits and a good credit history before they even graduate college.
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Parents can remain satisfied and calm knowing that your student has a credit card to use in case of an emergency.
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If you get a credit card that offers rewards, your student can use the card to purchase books, groceries and other supplies and quickly earn rewards.
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