Student Credit Card, The Foundation Of Credit History

Posted by Nick Niesen on October 29th, 2010

Typically, the life of a student involves a lot of expenses. And if you're attending college away from your family, having a credit card is always handy just in case you need to make emergency purchases. But for those who want to prove their independence, and take care of their own financial problems, the very first card that you may want to find in your wallet is a student credit card.

Before, applying for a credit card with no established good credit history is difficult. That was then, now is very much different. If you are a qualified student from an accredited university, you can avail of student credit cards offered by reputable banks in the state.

Student credit cards are especially designed for students; it is similar to any card, but it has more restrictions compared to non-student credit cards.

Some of these restrictions include:

-almost all student credit card holders are first timers when it comes to having their very own credit card, and in order to limit the bank's risk, these banks limit the credit amount to as low as $500 and to a maximum of $1000

-some issuing banks require a co-sign from parents or guardian

-interest rates charged for student credit cards are quite high since they don't have a proven credit history yet; in case of a loss, the amount is spread over the entire student population

Having a credit card is good, and students who have cards enjoy much of its benefits. But it doesn't end there, the students should also realize that credit cards offer a great value accompanied by a greater responsibility.

While it is most exciting for most students to have a credit card, others may find it scary. This is the initial step to responsible adulthood. At an early age, the student must learn to take care of his/her finances by using the credit card wisely and build a good credit rating.

Nowadays, the credit card choices being offered to students are no longer limited to high APR's, no benefits, and high fees. Issuing banks also offer reward cards to give students the opportunity to make points for cash back, merchandise, entertainment rewards, and airline regular flyer.

Some credit cards offer the students zero percent interest rates for a period of six months and maximum cash back of 5% on eligible gasoline station purchases, grocery stores, and drug stores. These cards usually have no annual fees; and these features are just recently introduced to the market. So the student can expect extraordinary features of the new phase of student credit cards.

Statistics have proven that most student credit cards are kept long after graduation, which provides the bank issuer an enormous customer value.

The students also benefit a lot from student cards. A student's life is accompanied by frequent spending on tuition fees, books, rent, road trips, and food. They will be given an opportunity to build a good credit history.

A student's years in college are a time for growing up, finding ones self, and choosing the right direction. It is therefore critical to build a solid financial record by using your credit card responsibly.

Once you have a good credit history, you will encounter no problems in making credit card applications after you graduate. And you have your student credit card to thank