How to Choose a Student Credit Card?

If you plan to apply for a student credit card, this article is for you. Have you done extensive research about the different student credit cards offered in the market? Did you take your time in exploring your options? Do you think you’ve found the student credit card that matches your needs?

Let’s discuss some important questions that you need to consider when choosing a student credit card. Before making your final choice, check out the following points:

It offers 0% APR- a great deal, right?

Yes, a low interest rate is very important. However, don’t base your choice on the interest rate alone. Just because a student credit card has 0% APR doesn’t guarantee a great deal. Some cards may promise a low interest or zero interest for at least the first 3 months or 12 months, but how much would the regular rate be after the introductory period?

You may be surprised to find that the card has a much higher rate than other cards. Thus, before signing up for the 0% offer, don’t forget to check out the rest of the fees and the terms that applies with your chosen card.

Do I need a co-signer to be approved?

Some credit card companies require students to have a co-signer to sign the agreement with them. This means, in case you fail to keep up with your debts, your co-signer would be personally accountable to pay for them. A co-signer must have a good or excellent credit history. If your parent or relative enjoys good credit history, you may ask them to cosign for you.

Nevertheless, some student credit cards do not require a cosigner. Even without credit history, a student can already be approved for his own credit card account. In fact, these cards can be used as tools for establishing your credit history.

Take note, that student credit cards usually provide a low credit limit for their holders. Since you haven’t yet established your credit history, you are still considered as a risk for lenders. Once approved however, you can request your credit card issuer to raise your credit limit if your record proves that you’ve been a good payer in the past months. Some companies would automatically increase your credit limit if you’ve been consistent with your payments.

Have you read the fine print?

Some consumers don’t even bother to read the credit card agreement thinking that it’s just a waste of time. True, reading the agreement can be inconvenient especially when the document is so long and written in such small printing. But examining the fine print is definitely worth it!

Don’t just rely on what the ads tell you. The real terms and conditions of a credit card are in the contract. For instance, a card may offer a low APR but it could carry an expensive annual fee and late penalty charge. Remember, if you won’t read the agreement, you wouldn’t know the complete information about it.