College students are at a special place in life when they are becoming independent of their parents’ financial wing and often assuming debt of their own to pay for their education. Not too long ago, it was very difficult for a college student with no credit to get approved for a credit card. However, due to the current ubiquity of credit in everyday life, this has changed. Since so many individuals find themselves in the same situation at the same time, there are many credit card companies that tailor student credit card programs in order to attract these new young buyers.
Since many students are already carrying the burden of college loan debt, student credit cards in general will be geared toward helping the student build credit for future endeavors, such as getting a mortgage, loans for graduate education, or just credit cards with more benefits.
Usually they will have a low credit limit to discourage abuse from inexperienced and overzealous “shop-o-holics.” The APR, or annual percentage rate, can be quite high sometimes as well, so shop around for a low one. Of course, this is of no concern to the responsible credit card owner since APR is just a fancy way of saying how much extra money you owe on past-due balances. However, it is a good idea to aim for getting a low one anyway. Once you have established a good credit score, it is much easier to get accepted for ones with very low APR.
Often times these cards will be promoted at freshmen orientations or just in general around campuses. Gather a few and compare their plans before settling on which student credit card is right for you. Don’t forget to check on the internet as well, you can often find better deals than the ones advertised on campus. If you are a parent concerned about your child assuming the responsibility that comes with having a credit card or maxing out the limit that comes with a student credit card, consider experimenting with a prepaid credit card or debit card first, to get him or her used to the idea of creating a budget and keeping track of spending. Or consider specifically looking for a student credit card with a low credit limit, and keep in mind that most banks and credit card companies will gladly lower a credit limit for you if you like.
Overall, a student credit card is really the ideal choice for anyone just getting out of high school and looking to establish some credit, even if they are not in school. They are ideal for people simply entering the workforce as well, as they can immediately gauge income versus spending without the extra confusion of college loans. And they are excellent educational tools for young people of all walks of life. Like all credit cards, be sure to read all the details of your agreement and figure out which one best fits you or your young student’s particular lifestyle.