Tips to help college students build their credit reports and continue their education.
Posts tagged apply for a credit card
Four Programs You can Choose From to Get Your Very First Credit Card
Jul 26th
Students and minors often find it difficult to get approved for their very first credit cards. After all, they do not have credit records to present to their prospective issuers when they attempt to apply for regular credit card programs. Aside from this, most teen-age card applicants do not have stable jobs that they can use to guarantee the immediate repayment of whatever debts they might be incurring.
Still, it is possible for students and teenagers to get the credit cards they need. There are actually four card programs available to first-time cardholders. Through these card options, students and minors can gain access to business establishments that rely solely on card transactions. Not only that. Through their very first credit cards, young consumers can successfully launch their credit reputation which paves the way for a bright financial future.
So, what are these four card programs open to students and first-time cardholders? Let us discuss them one-by-one.
Four Card Options For First-Time Cardholders – First Credit Card
1. Credit card for students. Teen-age card applicants can get approved to use credit card for students. However the main requirement for this student credit card program is that the applicant must be currently enrolled in a college or in a university. Now what should a student consider before applying for and in using a credit card for students?
Well, a student needs to remember to apply only for the student credit card that possesses the lowest possible interest rates and fees, and the most flexible payment terms. And after he gets approved for a credit card for students, he must resolve to use his card in the most responsible way he can. He also needs to stick to just one card, so that he can avoid running large credit card balances which will prove very difficult to pay off.
2. The bank where you opened checking or savings account. If you have a savings or checking account with a bank, then you can approach the customer service representative of your bank, and ask about the possibility of opening up your first credit card. Having an existing relationship with your bank can improve your chances of getting your credit card application approved, so long as you have been responsible in managing your bank account.
3. A department store or gas card. Department stores and gas companies usually have easy approval credit cards. Through their quick approval system, you can immediately get the credit card you need for you to make purchases and pay off your monthly bills. However, these credit card have one big downside. Your card will charge a very high interest rate and this can cost you a lot, especially when you decide to carry a credit balance from one month to the next.
4. A secured credit card. Even if you lack credit history, you can still get approved for a secured credit card. You just need to submit all the relevant documents, pay the charges and fees to activate your card, and provide a monetary deposit that will serve as collateral for the usage of your credit card. And soon enough you can have the secured card you can use in making purchases and even reservations in commercial establishments that depend on card transactions.
We hope that this article helped you see the credit card options that you can take advantage of should you want to get and use your very first credit card.
(1 votes, average: 5.00 out of 5)The Pros and Cons About Student Credit Cards
Jun 7th
Are you thinking about applying for a student credit card? Before you go and sign up that application, carefully weigh the pros and cons that can result from using a credit card. By doing so, you can be more aware about the steps that you can do to avoid getting yourself into trouble.
The Pros about Credit Cards for Students
Build early credit history. Applying for a credit card for students is the easiest way to build credit history. If you are a student, you have the privilege to get approved for an unsecured credit card without difficulty. Even with the new changes to the credit card law, it is still much easier for students to get their first credit card despite the absence of credit history.
Why is it important to build your personal credit history while in college? The sooner you start, the more impressive it will be to future creditors, insurers, and even to employers and landlords. The length of your credit history comprises 10% of your total FICO score so starting early can give you that significant advantage.
A good training to financial independence. Letting a young person handle a student credit card is an effective training on responsibility and debt management. Parents can play a big role in teaching their children about the proper use of credit cards. Indeed, teenagers need not get themselves stuck in bad credit to learn the consequences it can bring.
The Cons about Credit Card for Students
The risk of overspending. There is no denying that owning a credit card poses the risk of overspending. In fact, surveys show that a lot of teenage cardholders are guilty of such a bad habit. Splurges and unplanned purchases can quickly lead to a mountain of debt and bad credit. Therefore, students must learn how to exercise control over their credit cards.
Maximizing credit limit. Credit cards for students usually have lower borrowing limit compared to regular credit cards. While it is not necessarily a bad thing, some student credit card owners are prone to maximizing this limit. Such a habit can be damaging to your credit history. Why so?
One of the factors that determine your final credit score is your credit-to-debt ratio. Using up your available credit down to that last limit can pull down your score by as much as 10%. This is why financial consultants advice cardholders to keep their credit card use minimal- at least below 40% of their borrowing limit to protect their credit rating.
Increased amount of purchases. Students need to be aware that if they fail to pay their full balance on time, they will incur the additional interest rate cost in their bill. The interest rate can range anywhere from 14% to 20%, depending on the Issuer. While some student credit cards may offer 0% APR, that rate may only be applicable for 6 months or a bit longer. Afterwards, the regular interest rate will apply.
(1 votes, average: 5.00 out of 5)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)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.
(1 votes, average: 5.00 out of 5)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.
(1 votes, average: 5.00 out of 5)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.
(1 votes, average: 5.00 out of 5)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.
(1 votes, average: 5.00 out of 5)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.
(1 votes, average: 5.00 out of 5)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.
(1 votes, average: 5.00 out of 5)
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