Tips to help college students build their credit reports and continue their education.
Student Credit Articles
Establishing Credit History for the First Time
Jun 2nd
One of the most important aspects of being financially independent is establishing personal credit history. If you are a student in college, this is the perfect time for you to start thinking about establishing and building up your credit rating. Listed below are
Tips for first time credit builders on their first credit card:
Open a bank account. Although a savings or checking account will not be reflected in your credit report, it is a great way to get an easier approval from prospective lenders. If you have your own bank account, a lender would have more confidence in your ability to manage credit and debt repayment.
Apply for a student credit card. As a student, you have the privilege to get approved for an unsecured credit card without difficulty. Under the New Credit CARD Law, consumers who are under 21 years old must get a co-signer or must have independent income to get approved. If you are under 21, your parents are the best candidate to act as your co-signer, as long as they have good credit history.
Apply for a secured credit card. For students who do not have a co-signer, a secured credit card is a great option. Unlike a student credit card, you will be required to submit a cash deposit in your account which can range from $200 to $500, depending on the credit limit you want. Youngsters who are starting to build credit history are advised to start with a low limit ($200) to exercise control over their credit card spending.
Get a department store card. Another way to start building credit history is to get a credit card issued by your favorite department store. A lot of merchants offer store cards to their loyal customers and offers credit reporting to the credit bureaus.
Get a gas station card. If you drive your own car, perhaps you may consider getting a gas station credit card from your preferred gasoline company. Just make sure that the company does offer credit reporting to the three major credit bureaus.
Use your credit card regularly. Keeping your student credit cards or secured credit card in your wallet will not help you build credit history. You can only build credit by charging expenses to your card and submitting your payments on time. As a student, this is your chance to prove that you are ready for financial independence and the responsibilities that comes along with it.
Check your credit report regularly. Consumers are advised to check their credit reports at least once every six months to ensure that it contain accurate information. Keep in mind that you have the privilege to order one free copy of your report from the three credit bureaus each year by visiting Annualfreecreditreport.com. In case you find errors in your file, you also have the right to dispute or request for corrections by sending a letter to the bureau that issued your report.
(1 votes, average: 5.00 out of 5)Things Credit Card Holders Must Be Aware Of
May 30th
There’s a great deal of information that consumers need to know about credit. Being aware of the basics of credit card management as well as establishing credit history will help first-time cardholders in selecting and using their very first credit card.
And not only that. Being knowledgeable about credit cards will also help individuals avoid making costly mistakes as they apply for credit card programs. So what are the basic information that all prospective cardholders, especially students must be aware of?
Things You Need to Know About Student Credit Cards
- There are different types of credit cards. Even though credit cards have the same shapes and sizes, they do not carry the same terms and conditions. Before you obtain a certain type of credit card , know what options are available to you. You will be more likely to select the most suitable card for your needs and financial capabilities if you know exactly what is being offered by different card issuers.
- Credit cards possess different features. Credit cards carry different features like interest rates, credit limit and payment terms. These features must influence your decision whether or not you will take the credit card program being offered to you. After all some of these features can affect the cost you have to pay later on.
- Card charges are billed once a month. You should know that there is more to credit card billing than getting a mailed statement every month. So you need to understand the billing process of your chosen card issuer. This way you can comprehend what and how your credit card company charges you each month.
- Credit cards come with fees and charges. Credit card companies make money by charging fees and penalties on the credit card for bad credit programs they offer. Still, you can avoid paying large fees and charges, if you will make the right decision on which credit card to apply for and even on the way you pay your monthly bill.
- Choose credit cards with care. Take your time in shopping and comparing the features and terms of the cards you intend to apply for. This way you can choose the right card that will work to your advantage.
- Be diligent and persevering. Because your very first card will be the key in establishing your credit history, you need to be diligent in doing research.
- Pay your bills and charges on time and in full. These two activities will help you maintain excellent credit ratings which are important since they influence the credit and financial options that will be made available to you.
- Fight the urge to get more than two credit cards. Applying for way too many cards can cause a negative impact on your credit history. And it can also reduce your chances of getting approved for the credit cards you have been applying for. So resist the urge to get too many credit cards and be contented with the ones you already have.
(1 votes, average: 5.00 out of 5)Tips for Parents: Help Teens Manage Student Credit Cards
May 24th
A lot of teenagers find it difficult to control their credit card purchases. As soon as they get their very first credit card, they tend to use it as frequently as they can. Some teenagers swipe their cards to buy whatever they like – the latest albums, movie or concert tickets, and of course the trendiest clothes they can get their hands on. As they keep charging purchases on their cards, they will just start worrying about their obligations when their parents receive the financial statements of their credit card accounts.
But despite the scenario above, parents still need to train their children how they should manage their first credit cards. After all, the way they handle their finances and credit lines today will show how they will manage their finances as adults in the future.
But what should parents teach their teenage children regarding credit card management? What tips can they give their teenagers in handling student credit cards? We have listed some tips below.
Tips for Parents: Help Teens Manage Their First Credit Card
- Understand the concepts of interest rate and fees. Some teenagers only look at the cost of items. They do not really think about interest rates and fees imposed on credit cards for students. Thus, parents need to patiently explain to their young kids what these items mean. Show them how rates of interest and penalties can cause a small debt to balloon out. This way, they can understand why it is important to avoid incurring debts as much as they can.
- Determine a need over a want. Teens do not usually understand what is necessary and what is unnecessary. They just follow their desire to buy the products they like. But if they will continue doing this, for sure they will accumulate large credit card debts. So, parents need to address this issue. They have to point out what is really needed over what is just wanted. This can help their teenage kids determine which purchases they can charge on their credit cards for students.
- Responsibly handle credit card accounts. It is also important to teach teens to pay charges in full and on time. Parents should be responsible in explaining to their children the importance of paying debt charges on time. Instruct them how this affects their credit scores. This way parents can encourage their young kids to work on building and maintaining good credit history.
- Come up with a monthly budget. Teenagers also need to know the importance of budgeting. They should be responsible in identifying their daily and even monthly expenses as against their cash allowances. This way they will know where their money goes each day and each month. A personal budget will also help young kids to cut unnecessary expenses, especially when they go over their allocated allowances. This is a vital money-handling skill that your children can certainly use when they become adults.
Teach your teenagers these four tips in managing student credit cards and for sure you will help them become financially-stable and responsible individuals.
(1 votes, average: 5.00 out of 5)Key Points Concerning Student Credit Cards
May 20th
If you are a young person who owns a student credit card or are planning to apply for one, this article was written just for you. Check out the following
key points about students and their first credit card:
Credit card companies love students. For credit card companies, high school and college students are two important niches. By becoming their first credit card, students are more likely to stay with the same issuer even after their college years.
To attract young people, many issuers offer freebies (shirts, caps, CDs, mugs, gift certificates, etc.) as part of their marketing strategy. However, the New Credit CARD law prohibits credit card companies from distributing flyers or setting up application booths within 1,000 feet of school campuses. The new law aims to discourage young people from signing up for a credit card without doing research or reading the Terms & Conditions.
Understanding credit scores. Yes, a young person can establish his/her credit history by applying for a student credit card. Indeed, this is the only opportunity to get approved for an unsecured credit card without credit history.
However, teenagers need to understand how the FICO scoring system works. For example, the FICO score is calculated based on different categories and one is payment history (35%). In order to build a solid credit foundation, students must be able to consistently keep up with timely credit card payments.
Furthermore, not all issuers of student credit cards offer credit reporting service. To build your personal credit, make sure that your chosen student credit card will report your payments to the major credit bureaus (TransUnion, Equifax, Experian).
Interest rates, fees, terms and conditions. Before signing up your credit card application, check the interest rates, fees, as well as the policies of your chosen issuer. In comparing student credit cards, do not just focus your attention on the APR or the interest rate. Instead, pay attention to the smallest details to make sure that you will be making the right choice.
Since it will be your first credit card, it is recommended to ask for assistance from your parent or guardian or a friend who has good credit history. If there are terms in the Agreement that you do not understand, do your homework or ask for help.
(No Ratings Yet)Things to Consider When Applying for Your First Credit Card
May 18th
Students have the privilege to get approved for an unsecured credit card despite not having credit history. For this reason, financial advisors recommend applying for your credit card while you are a student. Today, let’s discuss some
tips on how to you can find the right credit cards for students:
Credit Card Features – Rates, Fees and Conditions
Check the terms and conditions before submitting your application. Understand how the interest rate is calculated. Keep in mind that credit cards with variable rates are subject to increase depending on the Prime Rate. How much is the penalty fee, the annual fee, balance transfer fees and other finance charges?
Once you submit your credit card application and gets approved, you are subject to abide by the Terms and Conditions of your chosen credit card company. Hence, it is very important to pay attention to the rules before taking action.
On Being A Student Credit Cardholder
While conducting your search, you may find that some credit cards for students offer introductory interest rates and exciting rewards. Young people can easily get attracted to credit card deals especially since it is their first time to apply.
However, before grabbing the offer, check the rates, fees and conditions when the introductory period ends. If you want to get a student credit card with rewards, make sure that you will be able to post your payments on time to avoid high interest rates or expensive penalty charges.
Are You Ready to Use Your First Credit Card?
Owning a credit card is a big responsibility. Yes, you have the responsibility to your credit card issuer to pay your debts in a timely manner. More importantly, a student credit card can be your tool in establishing your personal credit history so that by the time you graduate from college, you have already built a solid credit foundation for yourself.
When used correctly, credit cards for students can bring many benefits. However, when used carelessly, it can lead a person to uncontrolled debt and bad credit. Use your first credit card to prove that you are smart enough to manage your own finances without getting yourself in trouble. Be exercising self-discipline and motivation, you can surely enjoy the advantages of having a credit card.
(No Ratings Yet)How Students May Ruin Their Personal Credit
May 13th
While nobody wants to have bad credit, you unconsciously inflict damage to your credit history without even realizing it. If you are a student or a first time credit card holder, below are some things you need to avoid so as not to ruin your personal credit:
- Submitting multiple applications to different companies. Did you know that sending out too many applications to loan companies and credit card issuers can badly hurt your credit? Students usually get a lot of offers from student loan firms and credit card companies so they are prone to committing this error.
Keep in mind that each time you try to apply for credit, an inquiry will be made into your credit report. These inquiries will be reflected in your report as well. Having too many inquiries in your report can instantly make you a “Risky” customer in the eyes of creditors and insurers.
- Carrying a balance in your account. Contrary to what others believe, leaving a balance in your credit card accounts will not improve your credit standing. In fact, paying only the minimum monthly due payment increases the risk of debt build-up.
To keep a good credit standing, make it a goal to pay your complete balance each month. Doing so minimizes your chances of accumulating debt in your account; saves you from additional credit card charges such as interest rate and late penalty fees; and frees up your credit limit.
- Maximizing your borrowing limit. Even if your credit card for students come with zero interest or a low rate, you should still keep your charges minimal (ideally, 40% or less). You should know that your credit-to-debt ratio is a standard factor used in calculating your FICO score. It makes up 10% of your final rating.
- Being late in making payments. Being late in submitting your payments even just for one day can have a dramatic effect in your credit standing. This principle applies not only to your student credit card but to the rest of your bills as well.
If you’re having trouble submitting your payments on time or remembering your due dates, you may consider setting up an automatic payment system with your bank. Remember, payment history makes up 35% of your credit.
- Not reviewing your bills. Carefully examining your monthly statements of account is an important step that must never be overlooked. If you find any error in your bill, you have the right to dispute those charges.
Be sure to read all notices that comes from your credit card Issuer. The new credit card law mandates Issuers to give at least 45 days of advance notice before making changes to their terms. If you do not bother to check your mail, you might be surprised to find out that your interest rate has already increased without your knowledge. By that time, it can be too late for you to complain.
(No Ratings Yet)How Teens Should Manage a Student Credit Card
May 7th
While parents can give all the advice they can give to help their teenagers stay away from bad debt, they cannot be there all the time to watch they’re every spending. Once classes start, many students will be left on their own with their first credit card.
Are you a student who owns a credit card? If yes, then consider it as a blessing that you can use for your studies. However, along with the convenience it provides are the responsibilities on your shoulders. If you’re going to use your student credit card as a responsible adult would, you can be sure that it will bring you great advantages later on. With correct management, you will be building an excellent credit foundation for yourself.
Consider the following credit card management tips that are not just meant for students but for adult credit cardholders as well:
Understand the terms of use. Before even signing up that credit card application, see to it that you are aware of the rates, fees and conditions associated with using your card. As first time cardholders, teenagers may not be familiar with finance terminologies. Parents must review the Agreement with their kids and explain to them the implications of the terms.
Review your monthly bills. Examine your monthly credit card statements to be sure that all the charges in your account are accurate. If you notice unfamiliar charges, call up your issuer to clarify the matter. It is not uncommon for cardholders to be charged with bills they never incur. Students must understand that all consumers have the right to dispute erroneous billing as stated in the Fair Debt Collection Practices Act.
Skip the interest rate. Credit cardholders can save a great deal by not paying the interest rate. How? If you pay off your monthly balance completely, then you should not have to pay the APR. If your card offers 0% APR, make sure that you are aware as to when the introductory rate will expire.
Keep your charges minimal. It does not really matter whether you card has low rate or a high rate. The surest way to avoid bad credit is to keep your charges minimal. This way, you can easily pay off your full balance each month and avoid additional finance charges such as interest rate, late fees, over-the-limit fees, etc.
Choose a credit card that suits you. Consider your personal needs and lifestyle. Don’t compare yourself with other people, as each of us has his/her own financial capabilities. Don’t be tempted to get a reward credit card just because your friends or classmates have one. If you cannot commit to paying your monthly balance in full at all times, then a non-reward card with a low interest rate is the most practical choice.
(No Ratings Yet)Credit Card Advice for Freshman College Students
May 3rd
Many high school and college students apply for their first credit card while in their freshman year. Even with the new changes to the credit card law, many teenagers are still encouraged to get a student credit card instead of wait until they’ve graduated.
Because a co-signer is required for those who are below 21 years old, parents can now monitor their child’s credit card applications and help out with the process. Before owning a credit card, teenagers must realize the responsibilities associated with being a cardholder.
Remember that by using student credit cards smartly, not only can you enjoy the convenience of paying with credit cards, you can also build a solid foundation for your personal credit history. Take a look at the following advice:
Plan it out. If you own a student credit card, you must avoid unplanned purchases. Give yourself at least a week or two to seriously consider if it is really something worth paying with your credit card. The questions below should be able to help you decide the matter:
- Will this particular purchase be relevant to my schooling?
- Do I have the means to pay it back by myself?
- Or do I have to ask my parents for help with repayment?
- Is it really something I need or something I want?
Get to know your student credit card well. Your credit card can either become your friend or your enemy, depending on how you control it. Like a true friend does, you should get to know as much as you can about your credit card.
For instance, do you know . . .
- How much is the APR applicable to purchases, balance transfers and cash advances?
- How much is they penalty fee for being late with your payment?
- How much is the annual fee?
- If the current low interest rate is subject to change after six months?
- If your payments will be reported to the major credit bureaus so you can build up your credit history?
Before signing up, make sure that you are clearly aware of the Terms and Conditions of your Issuer. If there are terms that you don’t understand, you can ask your parents to explain them to you, especially if they are co-signing your account.
Say no to multiple cards. Trying to manage three or more student credit cards can be very difficult especially since if you do not have a source of income. It also increases the risk of bad credit since you may be tempted to leave a balance on each of your cards.
Hence, young people are advised to start with one credit card for student as a tool for building credit history. Even if you get offers in your mail from various Issuers, do not sign up unless you’re ready for another credit card.
(No Ratings Yet)Best Tips to Avoid Student Credit Card Debt
Apr 28th
Every year, thousands of consumers struggle with credit card debt- many are student credit cardholders. If you are a teenager who owns a student credit card, what can you to avoid debt problems? Consider the following:
tips to avoid debt for student credit cards holder
Ask your parent to be your co-signer. According to the new Credit CARD Law, students who are below 21 years old must have a co-signer. Having a co-signer is ideal because a parent can assist a young person in evaluating credit card choices. Review the Terms and Conditions with your parents before deciding which student credit card fits your needs.
Start with a low limit. Because students do not have regular job, it is best to start with a low credit limit. A low borrowing limit is recommended so that a young credit cardholder can exercise more control with his/her monthly spending.
Check your bills. Do not be complacent that all charges in your bill are correct. As the owner of the account, it is your duty to check your monthly credit card statement to make sure that you are not being charged with purchases that you did not make. Keep in mind that consumers have the right to dispute inaccurate reporting.
Do not use your credit card on entertainment. Students love doing recreational activities and usually it also involves money. If you own are student credit card, make sure that you are not using your credit card on unimportant purchases. To avoid unplanned spending, do not bring your student credit cards when going out with your friends on Friday nights or if you just plan to hang out in the mall. Use cash instead of using your credit card.
Plan before you buy. Do not use your student credit card to buy items that was not in your plan to buy in the first plan. For instance, if you find a nice dress or a cool shirt on display while hanging out, do not use your credit card to buy it even if the item is on sale. Before going to the grocery, make a list of all the items you NEED to buy, not what you want to buy. Remember, if you did not put it in your list, then most likely it’s not a very important purchase. Never leave the house to shop without a list prepared to avoid impulsive buying.
(No Ratings Yet)Benefits of Acquiring Credit Cards For Students
Apr 23rd
Many people will agree that using credit cards is the most convenient way to buy things or make payments. However for students, using a credit card should be first and foremost, all about building good credit history.
What are the benefits of using student credit cards? If you are a college student, why should you be interested in owning your first credit card? If you are a parent, why should you encourage your kids to apply for one?
Building Credit History with Student Credit Cards
The best time to apply for an unsecured credit card is while you are still a student. If you are under 21 years old, ask your parent or a friend with good credit rating to co-sign for you since it is now a requirement under the New Credit Card Law. On the other hand, if you can present proof that you are making your own living, then you can get approved for a student first credit card even without a co-signer.
Using a student credit card is an essential step in building your personal credit history as preparation for the coming years. Why should you strive to build early credit history? When you graduate from college, you will, sooner or later need to obtain a loan – be it a car loan, a personal loan, or a mortgage loan. When that time comes, having an impressive credit history will surely work to your advantage.
Aside from the assurance that your loan application will get approved, lenders will be confident to give you better interest rates and more flexible repayment terms based upon your credit standing. On the contrary, if you do not have credit history, you may find it more difficult to get approved for the best loan deals in the market.
Aside from creditors, employers and landlords will also be interested in what your credit report reveals. If you have good credit, you can choose to rent any apartment you like without worrying about getting rejected. For job seekers, an impressive credit score can be one of your strongest points that will separate you from other applicants.
Good Financial Skills Start Early
Owning a credit card while in high school or in college can teach young people about responsibility and strategy while practicing financial independence. Parents play a big role in providing support and advice for young credit cardholders. How?
First, parents must assist their kids in making the right credit card choice. Students must also understand how their credit card use affects their personal credit history. When used correctly, having a student credit card is an easy way to build solid credit. Nevertheless, students must always keep in mind the possible consequences if they fail to exercise responsibility.
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