Ease and safety. Using a credit card is a much safer mode of payment for youngsters compared to bringing cash. In case the card is stolen, the student can simply call up the bank and have the account frozen.

Know where the money went. You should also keep track on how your kids use their credit cards. How can this be possible without being too intrusive? Speak with your kids and encourage them to review their monthly billing statements with you. It’s only fair enough especially if you agree to help them with repayment.

For emergency purposes. A credit card for students will surely come in handy during times of emergencies. When cash is not available on hand, important bills or purchases can be paid off through a credit card.

Building credit history. Building early credit history is one of the most important advantages of having a credit card in college. Remember that this is the only time you can apply for an unsecured card without credit history. When you graduate, having good credit rating will definitely work to your advantage.

Money management skills. Another wonderful benefit of having a college credit card is to hone young people’s money management skills. As parents you can give them proper guidance by allowing them to take responsibility over their credit card expenses.

Parents – Do Your Part The guidance of parents is truly important. Help your kids from choosing the right college credit card, to understanding their issuer’s Terms and Conditions, and giving advice on how to manage their accounts more effectively.

Having the first hand experience of managing a real credit card account is a great preparation for a young person who’s about to enter the corporate world. Talk to your kids about the importance of keeping their credit history in good shape, as it will prove to be a major advantage after their college graduation.

But are college credit cardsto blame for the growing number of bad credit and bankruptcy victims? Are credit cards for students really a threat to the economy.

Are Credit Cards for Students Threatening the Economy?

Getting a credit card while in college is recommended to help young people build early credit. However, some students get a credit card for the purpose of using it to finance their college education.

Nevertheless, student credit cards are meant to provide short term financial support. A college credit card can come in handy when unexpected expenses arise. But along its advantages, there are also risks involved that young people needs to be aware of.

Credit cardholders must use their cards only for important purchases. More importantly, it is crucial to pay off balances in full each month to avoid the interest rates and the risk of debt build-up.

Unfortunately, a lot of cardholders are guilty of not submitting payments on time. Many cardholders choose to carry over their charges from month to month rather than pay off the entire balance. Obviously, such a habit puts anyone at a greater risk of bad credit. Whether you are a student or an adult, if you are not consistent with your credit card payments, you could be in big trouble.

Why Teens Need Credit Card for Students

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Student credit cards are great tools for establishing credit history. Lenders, insurers, landlords and employers all use credit reports to check an individual’s background and credit worthiness.

Credit card companies also require good to excellent credit. Those who enjoy an outstanding credit rating are given the best interest rates, higher limit and better privileges.

Clearly, every student who owns a credit card needs to be smart about handling it. Bear in mind that when used correctly, it can work to your advantage. On the other hand, when used carelessly, it can lead to a serious bad credit situation.

About the Author

Samantha Wilson is a consultant for credit cards for students. For years she has written student credit cards articles that would help build student credit.
Copyright 2009

Below is a guide that you can use before signing up for a student rewards credit card:

Which Type of Reward Suits Me? Reward programs vary from – Cash Back, Gas Rewards, Travel Rewards, and more. No matter how attractive the reward program may seem to be, you want to consider if it matches with your spending and lifestyle.

For instance, a lot of people are attracted to Frequent Flyer Miles credit card because they want to get the chance to fly for free. However, if you are an occasional spender, it can take you a very long time to get the free flight. If the card imposes a blackout date, you may not even get rewarded at all.

Matching a student reward credit card with your lifestyle is the key to enjoying the incentives it offers. Instead of focusing on the possibility of getting reward, be more realistic, and think about how you can benefit from your reward credit card without waiting for a very long time.

Check if the card offers credit reporting. One important service that you must not fail to check is credit reporting provision. See to it that your payments will be reported to the major credit bureaus as it is the only way you can build your credit history.

Grab a good introductory deal. It’s great to choose a student credit card with 0% introductory APR. However, you want to make sure that the interest rate will still be reasonable when the introductory period expires.

Reasonable interest rate. The best way to reduce the risk of bad debt is to go with a low rate credit card. If you can’t pay your monthly charges in full, then perhaps you should choose a non-rewards student credit card.

Take note that credit cards with rewards have much higher interest rates than their non-reward counterparts. If you keep carrying over your balance from month to month, you can easily fall in the debt trap.

In this article, let’s talk about college loans provided by the government and loans provided by private lending companies.

Student Loans Funded by the Government

Federal student loans are classified in two main categories- Stafford federal loan and Parent PLUS loans. Stafford loans are offered for students who can’t afford schooling on their own while PLUS loans are especially offered for parents who have that are dependents about to enter college.

There are income qualifications to be eligible for the subsidized Stafford loans. A subsidized loan frees up the borrower from paying the interest rate of the loan. Meanwhile, unsubsidized Stafford loans are available for anyone with good credit history. If you are going to apply for an unsubsidized loan, you will pay the additional interest charges.

Student Loans from Private Lenders

What about student loans from Private or commercial lenders? As can be expected, these loans have higher rates than Federal loans. However, it is generally easier to acquire them because of the more lenient standards.

You can choose to acquire more than one student loan. In fact, borrowers can apply for a Federal loan and Private student loan at the same time. However, if you plan to take out multiple college loans from different lenders, it is recommended that you consolidated your loan for easier payments.

Consolidating your loans can reduce your monthly costs because you only have to pay a single rate of interest. It also eliminates the confusion of beating different deadlines of payment. However, before signing up for consolidation, see to it that you only borrow the right amount of loan you need for your education.

As soon as you student loan is granted, utilize your funds wisely. If you can, try to pay off the interest rate of your loan while you’re still in college. By paying off your debts one step at a time, you can graduate with less amount of debts in your account.

About the Author

Samantha Wilson is a consultant for credit cards for students. For years she has written student credit cards articles that would help build student credit.
Copyright 2009

Get a department store or gas station credit card.

A lot of department stores offer credit cards that can be used for purchases. Since there is no credit check, anyone can get approved instantly. Gas stations also offer gas credit cards to their frequent customers and if you drive a car, you can easily get one. Like a department store card, no credit check is need so you can get approved right away.

Department store cards and gas station cards are quite similar to credit cards, in the sense that it allows the cardholder to purchase in advance and pay at a later date. Usually, the cardholder is given at least a month or 30 days to pay back the balance. However, unlike a credit card that allows you to submit minimum payments, store cards and gas station cards strictly require full payment on your due date.

Make sure that the issuer provides credit reporting service. Remember that the only way you can establish credit history is if your payments are reported to the major credit bureaus. To maintain good credit, charge only affordable purchases to your store cards and be sure to submit your payments on time.

Apply for a student credit card.

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Student credit cards are exclusively offered for students. Regular credit cards require good credit and secured credit cards require cash deposit. The only time you can get approved for a student credit card is while you’re still in high school or college. While standard credit card companies require a co-signer for young cardholders, you can get approved for a student credit card without a co-signer.

Find a student credit card issuer that will report your payments to the major credit bureaus. Credit cards do give you the option to carry over your balances and pay only the minimum due but if you want to avoid bad debt, it’s best to pay off your full balance each month. Through full payment, you can avoid the interest rate costs and you can be sure that your credit history will be free from negative marks.

About the Author

Samantha Wilson is a consultant for credit cards for students. For years she has written student credit cards articles that would help build student credit.
Copyright 2009

The Federal Student Loans
Both undergraduates and graduate students can apply for a Perkins Loan for financial support. On the other hand, Stafford loans and Parent PLUS loans are offered for undergraduates and students who are just about to enter college.

Federal student loans have lower interest rates than student loans offered by commercial lenders. Stafford loans have a fixed rate of 8.5 % rate while Parent PLUS loans have a lower fixed-rate of 7.9%. It is interesting to note that all federal loans for students have a fixed or permanent rate of interest.

Subsidized and Unsubsidized Loans
A Stafford loan can either be subsidized or unsubsidized. A subsidized loan frees the borrower from paying the additional interest. As long as the student is in school, he/she is exempted from paying the interest rate of the loan. However, this type of loan is only available for students from low income families.

Unsubsidized loans are open for everyone. The borrower will pay the interest rate of the loan, which is still cheaper than the cost of private student loans. The student can start repaying the loan after college graduation or if the students decides to quit schooling.

Federal Stafford Loans provide 6 months of grace period while Federal Perkins Loans provide up to nine months of grace period. The Parent PLUS loans are offered for parents who have dependents pursuing college. Nevertheless, there is no grace period provided. As soon as the funds have been provided, the parent is required to start with the repayment right away.

Pay Attention to Your Repayment

Untimely submission of payments can still pose a problem for borrowers of Federal student loans. Despite the lower rates, you can still get stuck in bad debt if you do not pay attention to your payments.

Bear in mind that the government will still require you to pay back the loan. In case of default, repayment will be automatically taken through salary deduction. You may also be disqualified from enjoying certain privileges such as tax refunds or tax deductions. In a worst case, a legal case can filed against you which can badly affect your credit history and reputation.

About the Author

Samantha Wilson is a consultant for credit cards for students. For years she has written student credit cards articles that would help build student credit.
Copyright 2009

Credit Cards- Remember the Risks

Of course, owning a credit card for college isn’t just about easy and convenient spending. As a college credit card holder, your goal should be to build a solid credit history. By using your credit card the smart way, you can build yourself an impressive credit score.

But what does being a responsible credit card holder mean? Aside from using your card only on important purchases, it is important to be prompt in submitting your payments. You can save a great deal by not paying the interest if you can submit your full payment before your due date ends. This habit also saves you from the risk of incurring bad debt.

Choosing the Right Credit Card for College

With so many student credit cards in the market, making a choice can prove to be difficult. But if you do extensive research, you can surely find the college credit card that’s right for you. Below are tips to help you make the right choice:

Ask your parents. If your parents own credit cards, you can ask them for possible recommendations. Parents can help their kids look for potential college credit cards. They can also share their personal experiences and teach their kids the value of smart credit card usage.

Read online reviews. A credit card review website is a good place to start your search. These sites offer reviews on different credit cards in the market. Here, you can see which credit cards are really designed for students and which ones match your lifestyle.

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Check out the APR. You’ll want to go with a card that has a low interest rate. This way, when you need to carry over your balances, you won’t be charged with expensive fees. Nevertheless, aside from the low APR, check out all fees and costs associated with your card.

Read the complete Terms & Conditions. Finally, after taking all factors into consideration, you should check the credit card’s Terms & Conditions. Analyze the credit card Agreement Form before submitting your application. Remember, this is the only sure way that you can compare student credit cards accurately.

About the Author

Samantha Wilson is a consultant for credit cards for students. For years she has written student credit cards articles that would help build student credit.
Copyright 2009

Credit Card for Students Tips to Avoid Debt

Use your student credit card with care. Use your credit card only for important purchases. Do not abuse your privilege by buying things that does not really contribute to your education. Bear in mind that as a cardholder, you have responsibility to your credit card issuer. Before charging anything to your card- regardless of how big or small the amount its, ask yourself, “Do I really need to make this purchase now”; “Am I sure that I can pay it back on time?”

Get a part time job to cover for your personal expenses. Even if your parents regularly send you money, why not consider getting a part time job especially during school breaks? This way, you can work on your personal savings and even pay off some of the bills on your own. Your parents will surely be happy of your accomplishments and you will feel proud of yourself as well. Doing so is a good training for your future.

Budget your monthly expenses. As early as now, you need to realize that it is not easy to earn money. Being frugal will be easier if you have a written budget plan. Adjusting your lifestyle according to the budget you created is the key to good financial management.

Don’t wait for things to go from worse to worst. Do you find it difficult to pay off your credit card balance and other bills? Don’t wait until your debts pile up or get unmanageable. If you don’t know what to do, ask advice from your parents or a legitimate credit counselor.

Pay your student credit card balance in full each month. If you used your student credit card for a purchase, pay off your full balance on or before your due date to avoid the extra interest rate costs. Although you are allowed to submit only the minimum due required by your credit card issuer, you will be spending a lot more if you take your time completing your payments.

About the Author

Samantha Wilson is a consultant for credit cards for students. For years she has written student credit cards articles that would help build student credit.
Copyright 2009

Interest Rates. Of course, everybody wants to get a low rate credit card. Some student credit cards may offer an impressive introductory rate but the more important question is, “how much will the regular interest rate be after the introductory period?” Think about the long term consequences of your decision. You don’t want to grab the initial low APR just to get stuck with a high rate card in the long run.

Terms and Conditions. Different issuers of student credit cards each have their own Terms and Conditions. If you won’t spend time reading the fine print, there is no way you can be sure that you made a good choice. No matter how tempting the deal is, you want to sit down, read the contract, understand its stipulations and ponder over them before signing up for the card.

Rewards. Credit cards for student can also have a variety of reward programs such as Frequent Flyer Miles, Gas Rewards and Cash Back Rewards Programs. Choosing a college credit card with rewards will depend on your lifestyle.

If you drive your own car and if you think you will spend a lot on your transportation budget, you may consider getting a gas rewards card. Calculate your estimated monthly costs on gasoline purchases and comparing with the savings you can enjoy if you use a college credit card with gas rewards.

Do you go to boarding school located in a State outside your hometown? Do you need to travel by plane to spend vacation with your family? If yes, then perhaps a Frequent Flyer Miles student credit card is the right one for you.

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Meanwhile, cash back reward student credit cards offer flexible ways to earn rewards. Typically, you get 1 cash back point for every dollar you spend on general purchases. Cash back cards are also great for young people because it can be more fun and exciting. You can get discounts from selected shops and exchange your points for cash, gift certificates or as free merchandise.

However, you should not take for granted your privilege to earn rewards. Don’t charge purchases on your credit card just for the sake of earning points. Use your card only for sensible buys and pay off you charges in full to avoid the interest.

About the Author

Samantha Wilson is a consultant for credit cards for students. For years she has written student credit cards articles that would help build student credit.
Copyright 2009

If this happened to you, what can you do? If you had to file for bankruptcy as a student, does this mean that your personal credit is damaged permanently? The good news is that there is hope for recovery. As soon as you’re discharged from bankruptcy, you can take positive steps towards rebuilding your personal credit and reputation.

Secured Credit Cards for Students

Bankruptcy erases all the past credit history that you tried to build for yourself. Hence, the only way you can recover or rebuild your lost credit is by opening new accounts. As someone who has gone through bankruptcy, you may think that no creditor or lender would be willing to extend credit for you again. But you’ll be glad to know that most finance companies are willing to open their doors even for customers with a record of bankruptcy.

One of the easiest ways to start rebuilding your damaged credit is to apply for a secured credit card. Secured credit cards are used much like regular credit cards, except for a few differences. One is that you will not be required to show good or excellent credit rating to be approved. This particular card is offered for people with poor credit history or no credit history at all.

A secured credit card also requires the submission of cash deposit in the cardholder’s account. This fund is also called a “security deposit” because it gives the credit card issuer the assurance that there is existing cash available should the cardholder default from his/her debt repayment. Security deposits range from $300 to $1,000 and above, depending on the issuer. Typically, your credit limit would be equivalent to the value of your security deposit. Therefore, if you wish to enjoy a higher credit line, then be prepared to submit a higher security deposit as well.

As expected, secured credit cards usually have higher interest rates and fees than regular credit cards. Needless to say there will be also be more restrictions for a secured card holder such as a lower credit line and the absence of reward opportunities. However, keep in mind that a secured credit card is only a tool for rebuilding bad credit. If you use it correctly, then you should be able to get an upgrade to a non-secured credit card account.

Take note that not all “secured cards” in the market provide credit reporting to the major credit bureaus. It’s very important to ensure that your issuer will be reporting your payments to the major credit bureaus regularly since this is the only way you can update your credit history. After at least a year of consistent payment, you should be able to improve your credit history and be eligible for opening other accounts with other lenders, insurers and credit companies.

About the Author

Samantha Wilson is a consultant for credit cards for students. For years she has written student credit cards articles that would help build student credit.

Copyright 2009