Getting your first credit card carries with it a degree of excitement and independence. Not only does it mean that you do not have to carry cash around with you, but you also have the power to “charge it.” A student credit card is often a little different than a regular credit card, and for that reason, there are some pitfalls that you need to be aware of before you apply for yours. Here are some things you need to know in order to get a good one to suit your needs.
In some cases, a student credit card will not require a cosigner, or even a minimum income – but most of them will. Basically there are two different types of student credit cards. One is like a regular credit card, the other is called a secure card.
The secured credit card works like a credit card, but you must deposit an amount equal to at least half of the credit limit – sometimes as much as 150% of it. With some of these there can be excessive fees so be sure to know exactly what is involved before you apply. It is even possible to have it so loaded with up front fees that there is very little to actually charge anything once you get the card. Check out the company carefully, or stick with the ones you are most familiar with.
When you look to get your quality student credit card, be sure to check the interest rate. Typically, these will be higher than a regular credit card. One thing that you need to be especially aware of is what happens if there are late payments or overcharging on the card. First, this could cause your introductory offer to be canceled, and second, it could raise the interest rate on the card to as much as over 28%! So you want to be sure that your student credit card will be handled as correctly as possible.
Rewards offered for purchases made on the credit card will make it even more interesting for you because this is a way to earn discounts, or even free stuff, depending on what type of card that you get. You can choose your student credit card so that you get rewards for different purchases. Most cards will give you from one to three percent on purchases like gas, food and medicine. Other cards will give you points for your purchases of CD’s and DVD’s, movies, electronics, restaurants, and theaters. Again, depending on the card you get, these purchases build points toward the types of purchases you make. Some credit cards will even give you many points each year if you maintain a B average.
Your student credit card may not be the best kind you can get, but it certainly can be a ticket toward getting the kind of credit card you want. After you have it for a while, and use it carefully, making your payments on time and not overcharging it, will show to various agencies that you can control it. With good spending habits it will also build up your credit rating which will enable you to get a much better card later on.