A student credit card is exactly what the name suggests. It is devised specifically for students. Student credit cards are becoming increasingly popular nowadays with more and more parents opting to give their kids one. It has many advantages over normal credit cards. Let us look at some of the advantages that a student credit card offers.
A student credit card lets a student have a glimpse at financial expenses and management. The student who hardly has a credit rating can take the first few steps towards building a healthy credit rating for himself. Credit ratings will be a very important part of their future lives if they wish to take loans for purchasing a home or a vehicle. If they take the first few steps towards establishing a good credit rating with the student credit card, then they will be more confident and better equipped to handle their finances later on.
Since the student credit card does not have an extravagant limit, the student will also learn to control the spending habits. Most student credit cards have a limit of $500 to $1500. So the student cannot think of spending anything more than that. This habit is best inculcated in the young age.
Parents are also able to keep a tab on the spending habits of their kids. It depends on the ownership of the card as to who receives the bill, but in most cases it's a joint ownership and both parents can see how their kid has been spending using the credit card. If at all you find that your kid has been using the student credit card for unwanted expenditures then you can guide them accordingly so that they can mend their ways.
Downsides
A student credit card has a higher rate of interest than most other credit cards. This is to prevent any loss for the credit card companies in case the student defaults. Also some credit card companies make it mandatory for the parent or the guardian to sign the application so that they will be liable to pay off the debts. Some kids do not pay back on time and fall prey to debt. Once the debt cycle beings, the high interest rate causes it to mound further and the student may find it very difficult to manage it. At the same time, they are not helping their credit ratings at all.
Some Popular Student Credit Cards
Discover clear student credit card is one of the popular student credit cards available nowadays. It has loads of features that are attractive and useful for the student. The five percent cashback is one of the highlights of this card. If you redeem your certificates from Discover's partner's the cashback doubles.
Chase flexible student credit card is another very useful card for students. Whatever purchase the student makes with this card enables him to receive points which can be redeemed for free gifts. It does not have an annual fee.
Citibank platinum select credit card has an APR at zero percent for all the purchases that are made within the first 6 months of the issue of the card. If the user has not defaulted with any other card company then the user can also transfer any existing balance on to this card.
So you can choose from any of these superb cards depending on the needs of your kid. Let's hope your kid learns to use credit cards effectively.
Student Credit Card Some advantages of gifting a student credit card to your child. It also describes the best cards in the market now. You also come to know how the card can be harmful to your child.
What are some (actual) APRs for student credit cards?
Everywhere I look, APRs are high. I applied for Bank of America, World Points Mastercard with a preferred APR of 15.99%. The preferred APR I recieved was 20.74% for purchases after the promotional period. misleading...
What I would like to know, is how normal is this, and what can I do to get a lower APR. Should I find a different card or live with it? Thanks!
Answer
The APR you get depends on your credit history. When I first applied as a student, American Express started me out at 12% and CitiBank started me out at 16% which they lowered to 13% after I asked them to.
The Guide to Credit Cards - http://straightfinances.com/pages/guides/credit_card.html
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Student credit cards are a great way for college students with little or no income to start establishing credit. Although they tend to have slightly higher interest rates than 'standard' credit cards-- they'll give you the chance to prove your creditworthiness and help you build your credit score. Eventually... with regular, on-time payments-- you'll be able to apply for 'regular' credit cards with lower APR's and less fees.
You can find a complete list of student credit cards here:
Hope this helps. GOOD LUCK!