College student credit cards are intended specifically for students who normally would not qualify for regular credit cards, as they do not have a steady income or a credit history. As a student, it is a good idea to establish a first-rate sound credit history at an early age, which would help you get a regular credit card in the future, regardless of your employment status.
College Credit Cards Versus Generic Credit Cards
In theory, college credit cards are identical to regular credit cards. However, a college credit card is meant for college students who do not have previous credit history. Hence, these cards have more restrictions or conditions than the generic cards. The top three restrictions include:
- Co-signature from the parent or guardian at the time of application
- Lower credit limit (Example: $500 to $1000)
- Higher interest rates than traditional credit cards: Normal interest rates on these cards are 16-18%
Advantages of a College Credit Card
A college credit card has become a necessity for most students. The advantages are many provided you understand how the credit card works and use it with caution. Students, especially in United States, are prolific users of these college credit cards. This is primarily because it gives them great flexibility to manage their credit.
Students can use college student credit cards to pay their tuition fees, to rent a car, or to fill gas.
In fact, there are certain college credit cards that offer low interest rates to students who maintain good grades. These cards are also packed with rewards and benefits. These cards help students to learn and manage their finance at a young age.
A college credit card can also be a pre-paid one, with a ceiling on the credit limit. This ensures that the student does not overspend and it also helps parents keep an eye on their children's spending behavior.
Characteristic Features of College Student Credit Cards:
There are many college credit card options from Citi, Discover, and Chase. Apart from these, there are many pre-paid card options. Most of these student cards have many of similar features including:
- 0% APR for the initial period of usually 6 months on both purchases and balance transfers (typically)
- No annual fee, at least for the first year
- Online account management at no extra cost
While many of the above characteristics are also applicable to many traditional more generic credit cards, there are certain distinctive features that make the college student credit card stand apart including:
- 0% liability for any unauthorized charges on the account
- A good GPA helps earns points for the cards
- Theft and fraud alerts
It is a good thought for students to have their own college student credit card. However, it is important to understand that, at an early age, bad credit could have horrible consequences. Parents can assist their kids in choosing the best college credit card based on their child's spending behavior and repaying capability. College credit cards promise financial freedom at a young age if they are used judiciously.
Robert Alan recommends that you visit CreditCardAssist.com for more information on college credit cards.
Why was I declined for a student credit card?
I am a college student. I got my first credit card 5 months ago and have never missed a payment. I applied for a department store credit card 2 months ago because I heard they were easy to get. I was denied for unknown reasons but I found out that credit card was through the same bank (Chase). I applied for the Discover student credit card a few days ago, because it has better benefits, but I was declined for insufficient credit history. Isn't this a STUDENT credit card? I have never missed a payment on my other $500 limit Chase +1 card. I have a job as a waiter at a popular restaurant and can pull in 20k a year. wtf? My dad makes 120k a year, it makes NO sense that I was declined... I'm kind of extremely pissed about it because I heard that every time a company checks your credit your credit score goes down. The Discover guy on the phone made it seem like I would definitely get approved.
Oh yeah, mate... I'm trying to build credit...
Yes, I have heard of a debt card... I prefer 5% cash back... mate...
Answer
The best way to get a credit card is to avoid the student card trap and have one of your parent cosign a card for you. You will get a better interest rate and build credit. Student cards have a lot of catches, high late payment penalties, variable interest rates, and ridiculous annual fees. The point of those cards is to get you in over your head with fees and penalties, so that you spend years paying a lot of money for nothing.
Also, the credit market is really tight right now. I make over 50k a year and my credit score is around 800, but I was recently turned down for a $25,000 auto loan (by Chase, incidentally) due to "insufficient income." Wtf? I make twice that in a year. I think they didn't like the fact that I'm self-employed. All the credit card companies are tightening their belts right now. It's getting more and more annoying to try to get approved. I think it's b.s. that it affects your credit score when someone runs your credit. How are you supposed to build credit when your score is damaged every time you try to get a credit card? It's a horrible system.
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