Should You Get a Student Credit Card?

Many college students own at least one credit card in their name.  Are you planning to apply for a student credit card too? Indeed, acquiring a credit card for student have many advantages but let’s not forget the risks.  In this article, let’s discuss points you should consider before signing up for a student credit card.

Repayment responsibility. Owning a credit card is much like acquiring a loan.  As the owner of the account, you have the obligation to pay your debts according to your creditor’s terms.  Hence, when you sign your credit card agreement, you need to be aware of your duties as a cardholder.  The specific terms may vary from one issuer to another so it’s important to be clear about the terms and conditions of your chosen credit card company.

Limits and penalties. As a student credit cardholder, you will be given your own credit line. You can charge bills to your credit card as long as it is within your limit. What happens if you exceed or go past the credit line?  Aside from paying the penalty fee, frequently exceeding your limit can have a negative effect on your personal credit score.

You are also expected to be able to submit your payment on the given due date. Failing to do so would mean paying the late penalty fee and if you fall in the habit of being late, your credit score will surely suffer.

Rate of interest. If you choose to carry a balance in your account, then you will be subjected to pay the interest rate. The interest rate varies depending on the issuer and the type of credit card you own. Generally, credit cards with rewards have higher interest rate than non-reward credit cards.  The same thing is true with student credit cards.

Some credit cards for students may offer an introductory rate which means you can enjoy a low APR or 0% APR within a certain period. However, it’s important to remember that teaser rates only last for a few months. Most issuer provide a 6-month introductory period, afterwards the regular rate will apply. Before signing up, check first how long you can enjoy the low rate and how much the regular APR would be when the introductory rate expires.

Purpose for a student credit card.  How do you plan to use your student credit card?  You should define your purpose from the start to avoid uncontrolled credit card spending. Unfortunately, many students have found themselves stuck in bad credit as a result of unplanned spending and poor management of their account. To avoid being in such a difficult situation, you need to set your own limits and follow the rules of building good credit.

About the Author

Samantha Wilson is a consultant for credit cards for students. For years she has written student credit card articles that would help build student credit.
Copyright 2011

Leave a Reply

Your email address will not be published. Required fields are marked *