What Are Secured Student Credit Cards?

Credit cards for students give young people a chance to open their own credit card accounts without the need for a co-signer. Thus, any student who wants to have a credit card can easily do so even if he or she hasn’t yet established a personal credit history. In fact, these student credit cards are primarily designed to help young people build an early credit history while they’re still in college.

Students and Secured Credit Cards

Secured credit cards on the other hand are designed for people with bad credit history or no credit history. Thus, even with the absence of credit history or despite suffering from a low credit score, a person can still acquire a secured credit card. Secured credit cards can be used to improve bad credit history.

What makes secured credit cards different from regular credit cards? Unlike standard cards secured cards require its holder to submit in advance a security deposit which amounts to at least 100% to 200% of the cardholder’s desired credit limit. Let’s say for instance that you need a minimum credit limit of $500, then that means you need to submit at least $500 security deposit to your account to enjoy your desired credit limit.

Parents who want to give their college kids with a credit card account may also consider providing them with a secured credit card. This way, a parent can exercise control or put a limit to the student’s spending. Such a limit can protect a credit card holder from the risk of uncontrolled spending which may lead to bad debt.

Giving a student a credit can be a good training ground when it comes to handling finances. Needless to say, young people still needs support and advice from parents or responsible adults. If you are a parent, you can make a big difference in helping a student stay away from debt problems.

Both secured credit cards and student credit cards are used for establishing credit history. IT is important however to choose a card that will report your payments to the major credit bureaus. Take note that despite the claims to be a secured credit card or a student credit card, there are credit card issuers who do not offer the credit reporting feature.

Remember that the only way you can build your personal credit history is if your creditor reports your payments to consumer credit reporting agencies. Last but not the least, you can only build good credit history if you use your credit card the smart away and avoid unpaid charges. Timely submission of payment is crucial in maintaining an impressive personal credit.

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.
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