Best Tips on Using Credit Cards for Students

Based on the 2009 study by Sallie Mae, a leading financing company, the average college student has at least four credit cards yet only 17% of these cardholders consistently pay off their monthly balances.


Although having a college credit card can be advantageous for building early credit history, teenagers must be very careful about how they spend with their cards. The modifications made to the Credit Card Law such as not being qualified for your credit cards for students unless you have a co-signer or proof of independent income are supposed to reduce the number of bad credit cases amongst college students.


If you’re a student who has a credit card, what can you do to prevent bad debt and the effects it can bring? Check out these tips:


Avoid carrying a balance. To avoid debt build up and maintain good credit rating, completely pay off your balance. Don’t be happy with just making the minimum due payment. It can save you a great deal by not paying the rate and additional fees.


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Applying for Your First Credit Card

If you’re a student, the simplest way to improve credit history would be to get your first credit card. With the changest to the credit card law, it is now a prerequisite to have a co-signer. In this case, your parent or guardian can help you out. However, if you can show proof of your own income, you’ll be able to obtain your student credit cards without a co-signer.

In the following paragraphs, we will talk about tips that you ought to take into account before applying for your first credit card:

Go with a low rate card. Rates of interest vary from one student credit card to the next. Rates can go from 15% to 35%. Look for a minimal APR credit card to protect you from debt build-up in case you have to carry over your balance to the next month. Look out for credit cards that have unbelievably low variable rate. Keep in mind that variable rates can increase at anytime depending on the Prime Rate.

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Credit Building Tips for College Students

In the past years, building credit history was easier for students with the help of student credit cards. Under the New Credit Card Law, students can only get approved for their student credit cards if they have a co-signer or if they can show proof of independent income. The amendment of the new law was meant to cut down the number of bankruptcy and bad credit cases among young people.

By co-signing a student credit card account, a parent or an adult can help a youngster choose the right card and give advice on proper management. If you are a student, here are ways on how you can build up your personal credit history without falling in the trap of bad credit.

Choose wisely. Do not sign up for a college credit card for the wrong reasons. Choose a credit card because it has reasonable interest rate and fees, no hidden charges, and fair terms. You may need to take some time comparing different offers from credit card issuers. If you are not familiar with credit cards, ask your parent or someone with good credit history to help you out.

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Top 10 Tips for Student Credit Card Owners

Owning your first credit card can be an exciting experience. However, being a credit cardholder means more than just easier spending. Remember that you have a responsibility to pay your debts on time and use your student credit card according to the terms of your credit card company.

How can you use your credit cards for students in building good credit history? Check out these top ten tips for you:

Charge ONLY if you can pay it back in cash. To be on the safe side, you need to consider repayment before charging anything to your card. Will you be able to pay back that purchase on time? Do you or will you have the cash to make full payment on or before the due date? If you have doubts, the wise thing to do is to skip the purchase and wait until you have the means to do so.


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How Students Can Manage Their Student Credit Cards

Surveys prove that many college students graduate with unpaid debts on their student loans which can amount to $20,000. Those who are still in college are faced with credit card debts amounting to $7,000 or even more. Even worse, there are many at a young age of 15-25 have already filed for bankruptcy. If you’re a student who owns student credit card, these staggering surveys should definitely concern you. What can you do to avoid falling victim of bad credit?

Here are some valuable tips you can in your personal life as a student to help you manage your finances wisely.

Make a Commitment

Bad credit usually results from splurging or uncontrolled spending. In order to avoid paying for unreasonably high balances, as a student you should have the will to restrain yourself from spending on things that are not really necessary. Every time you plan on buying, ask yourself, “do I really need this or do I just want it?” If you know that you can get by without making that purchase then, have the will to back out.

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Teaching Students about Credit Security

A lot of college students are excited about acquiring their first credit cards. Despite the ease and convenience that credit card brings, it is very important to learn how to handle a credit card for students properly. Reports show that a lot of college students graduate with unpaid debts on their account. They have used their student credit cards without control and have put themselves in a difficult situation.

Credit Card Companies Pursue Students

It is interesting to note that some financial experts believe that credit card companies view students as a very lucrative market. Students have the tendency to spend more not only for their school necessities but for other things as well.

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Credit Cards and High School Students

The Federal law doesn't provide any restrictions about issuing credit cards to minors. In fact, credit card companies consider teenagers as a very profitable market. Most credit card companies often require a co-signer when a minor applies credit cards for students. When a teenager reaches the age of 18, he has the right to sign-up for a credit ca on his name even without a cosigner.

Are Student Credit Cards an Advantage?

Some parents feel that providing their kids with credit cards while they are still in high school help them learn about money early in life. With proper guidance and support, obtaining a student credit card can help young people learn about how to handle their finances properly.

A student credit card is a great way in establishing a credit history in preparation for their future. Some credit card companies refuse to grant credit card approval for those without a credit history. But with the help of a parent as a co-signer, it will be much easier to get a credit card.

Or a Disadvantage?

On the other hand, a young person with a student credit card can also get into trouble. The convenience that a student credit card can bring may lead to uncontrolled spending. With just one swipe of the card, they can purchase an item easily at any time. Eating out in restaurants with friends is also just as convenient. They can easily do so without bringing with them any cash.

The problem comes when it's time to pay the bills. At the end of the month, their billing statement may reveal that they have spent more than their allotted monthly budget. It is also a possibility that a student who does not think about his spending for the past month has already exceeded his allotted credit limit.


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Avoid Student Credit Card Debt

Students are prone to acquiring credit card debt. Why? Because most young people do not know or are not paying attention on how to handle their credit cards correctly. Here are some practical advice on the proper use of student credit cards and how to avoid credit card debt.

It’s Just a Marketing Strategy

Be aware that credit card companies are experts when it comes to marketing their business. They spend millions of dollars in using different marketing strategies to get your attention, to grab your interest and move you to sign up with their company. Credit card companies may give away freebies, offer instant approval, and other promotional tactics which can be very hard to resist. Don’t be too naive in applying for a credit card just so you can get a free coffee mug or t-shirt. Remember, there’s more to it than just the freebie.

Don’t Settle for High Rates

There are so many different credit card companies that are competing in the market today that students don’t have to settle for a credit card with unsatisfactory features. Some credit card companies charge high rates for students because they haven’t yet established their own credit. However, there are still other credit card issuers who offer reasonable rates even for students like you. Don’t rush in signing up that application as if there’s no tomorrow. Take your time in choosing the right student credit card with the most reasonable rates. Compare the rates and features that each credit card provides. Only then can you be sure that you’ve chosen the right one.

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