College student Credit Cards: Sorts, Getting, Positives and negatives
Today, charge cards for students have grown to be quite popular as they enable them to have the benefits of cards with low interest rates. In reality, some cards do not charge almost any fees. Apart from the benefits, the cards also help the students to build credit. Nowadays, there are several such cards to pick from, such as secured, unsecured, merchandise, and prepaid cards. But, you need to always choose one that suits you the most. Along with, you should also keep in mind that charge cards come along with a lot of financial responsibilities. Therefore, you have to use them wisely.
It is a kind of card that will not require any cash deposit make purchases from a simple distinct credit. This sort of card for student offer limited or normal credit, but is the most preferred choice for the students. In reality, it has been designed in ways to simply help student to enhance their credit profile. An additional good aspect about this kind of card is that it offers 1% cash back as an added bonus amount on each and every purchase you make through it. Additionally, the card doesn’t come along with almost any annual membership fee. On the top of this, it even offers an extra 25% reward once the monthly bill is cleared on time. You can redeem the reward by way of a check or straight into your account. Moreover, this kind of card doesn’t put any limit to the total amount of money one can earn.
This is a type of card that fetches money from an account shared by your cardholder. Reliable and good secured cards always submit a detail of your payment record to credit bureaus to be able to allow you to build credit. The details of your payment record are submitted to three chief credit bureaus and email or text messages are accustomed to send monthly payment reminders. This sort of card usually charges around 20% of annual percentage rate (APR) on purchases, but doesn’t charge any annual membership fees.
Prepaid cards are quite similar to a secured one and it also contains a checking account. As its name suggests, in this kind of card spent the funds that you deposit in to the card. For this reason, the monthly fee associated with this particular card is quite nominal.
Important Guidelines To Help College Students To Get A Credit Card
In earlier days, it absolutely was quite simple for college students to have charge cards as there were many sources available. There have been a lot of companies who would offer free cards to students by simply filling applications. Unfortunately, in February 2009, Credit Card Act of 2009 came into existence and made very strict new rules regarding students to qualify for a card. Now, the rules have totally changed and are so difficult that students believe it is hard to qualify. Before you go to obtain a card, students are supposed to learn many things about the qualification and related stuff, following are few guidelines, you can have a look.
· Firstly, study about charge cards, how it works and such other things. Further, you even need to comprehend the due dates, what’re the billing procedures, late penalties, limit fees, how to boost your interest, ways to prevent any extra charges and a great many other card related queries.
Comparison of different kinds of card schemes and offers for college students can also be an essential task. You’d find a large number of card companies offering cards to college going students. As no two companies are similar, you’d find each company with various pair of rules. Interest rates, benefits and charges of each company differ with another. You need to occupy the responsibility of selecting one company that suits your requirements. Try to find benefits for yourself and try to avoid additional costs using some benefits.
If you may not have sufficient credit, then you may get a different form of charge card referred to as Subprime credit card. However, they’re many additional charges on these kinds of costs. In earlier days of such card, there is around 75% of limit on charge cards, now it’s 25%. You can see there’s a lot of difference.
While selecting a card, make it an indicate check whether your company is reporting to the big credit bureaus or not. Equifax, TransUnion and Experian would be the three very big bureaus which would help you in enhancing the credit score at a later stage.
Each time a student enters his/her college premises, he or she is flooded with offers from charge cards companies. These cards for students build a feeling of 신용카드현금화 responsibility, make them comfortable and make them to boost their credit as well. There are numerous features of owning such cards; nevertheless students needs to be cautious in handling a credit card as he or she has to comprehend concerning the debt factors of a credit card. We have laid down some benefits of having a credit card with students; refer the next points to learn about it.
Following the introduction of new laws regarding student charge cards, there has been many limitations for students to qualify for a credit card. However, according for some sources it is known that students of today are carrying lot of debts because of the charge card facility. These debts even carry forward following the student leaves college. Besides having many advantages, charge card for student carries a lot of disadvantages too; let’s have a review of them as follows.
Way too many cards in addition to debtors: In accordance with a survey in 2009 done by Sallie Mae, it absolutely was unearthed that students are wholly influenced by a credit card nowadays that is not at all a great thing. It is just a known fact that about 84% of college students are having the main advantage of getting no less than one charge card; while the typical is about 4.6 cards. Clearly, this means that if students is having one card, he can spend up to $5000, and similarly he can spend up to $15000 with 3 credit cards. As we know that interest rates are blooming today, it’s quite obvious the debt amount increases drastically.
Too high balances: This was actually probably the most problematic situation that found Sallie Mae; it absolutely was that $3173 was the mean balance of charge cards being carried by college students. It was shocking to learn this figure was the best among other figures. This demonstrates students are not utilising the cards for convenience purpose; instead they’re misusing the given advantage and are going beyond their limits.
These cards for students in addition to loans: This is also another burdening disadvantage while the debt of the students is carried forward to the coming years which develop into a loan debt. It is very sad that the students need to take the responsibility of paying it right after their commencement of careers. In accordance with Sallie Mae’s study in 2009, 23% of the students remained unanswered when asked about their loan payments, as the answers of the other 77% had no connection with the debt loan.