Student Credit Cards

Post date: 2008-07-07 05:49:43

Apply for Student Credit Cards

All people have different needs. So the credit card companies have designed different type of credit cards. Besides the average consumer credit cards, there are small business plastics and student credit cards which are designed especially for young people in college who just want to start their credit history. So, what is the main difference about student credit cards? Almost all credit cards work in pretty much the same way and are used for more or less same purposes. However, there are 2 main differences in student credit cards and these differences are credit limit and APR.

The credit limit for student credit cards is generally very low. This typically ranges from $500 to $1000 per month. Some people might argue the reason for such discrimination. Well, the reason is very clear and obvious. Most of the students applying for these credit cards have never used a credit card in their life, so neither do they have a credit rating and nor the knowledge about credit cards. While the first is what the credit card issuers look for before giving the credit card, the latter is what the credit card holder would like to acquire. Both of the purposes can be satisfied by keeping a lower credit limit. The credit card issuer reduces the risk that they are taking by issuing a credit card to someone who has never used a plastic and has no credit rating. It's good for the credit card holder too since this reduces their risk of debts which can be caused by limited or no knowledge of credit cards and by bad spending habits. Moreover, this credit limit would be sufficient for the needs of a student in general.

The APR on the student credit cards is generally higher than that on the consumer credit cards. Again the reason for this is that credit card companies are avoiding the risks of issuing a credit card to someone who is inexperienced in terms of credit card use.

The credit card companies might also have some strict terms and conditions for the student credit cards and generally require a parent or a guardian's signature as a guarantor.

Since credit cards are more of a necessity in today's world, the student credit cards are much recommended, especially as a learning tool in getting the students prepared for the life. Due to their peculiar characteristics of low credit limit etc, student credit cards cannot lead students into a totally rough debt situation.

This first credit card will teach them how to protect themselves from credit card fraud, where to use their credit card, how to control their spending, what the various benefits are, etc. The earlier they learn these things the better it is.

Moreover, the student credit card will also help you in developing a good credit rating. Remember that a bad credit rating will not only reduce your chances of getting another credit card later but will also lead to problems in approval of your mortgage and car-loan applications.