Facts about Student Credit Cards
The function of student credit cards is same as the regular credit cards. The credit cards meant for the students can help them build credit. Just as these cards can be of great help, they can jeopardize your credit rating too. The most important thing is to know and understand how these credit cards actually work. There are various other things to keep in mind. For instance, the rate of interest the student credit card attracts, what determines your eligibility, what will be your credit limit, what happens if you exceed your credit limits always and likewise. Mostly, it is seen that credit card issuers visit college campuses to offer student credit cards.
Consequences of credit card defaults are not uncommon. You tend to get drawn into a never ending cycle of debt. You try to balance your credit card debts and it becomes difficult to set priority for making payments.
Generally, payments for student credit cards should be made within 30 days from the time you make the purchase. Failing to do so attracts interest. It is always better to pay a little more than the minimum balance. In this way, you will be making payments not only for the interest but your principal amount will also get reduced. On the other hand, if you make the minimum payment, you are only paying for the interest rate and getting out of debt takes ample time. Finally, you land up at crossroads and you find yourself in a Catch 22 situation. It is very important to make payments for the credit cards within the time specified.
How student credit cards differ from the regular cards?
Even though the role played by the student credit cards is the same, they have certain differences. They are as follows-
•The rate of interest is comparatively low
•A cosigner is not required
•Minimum income proof isn’t required
•Annual fees are rare
•Credit limits are lower than the credit limits of the regular credit cards
•The student credit cards are easy to get provided a student has never faced any debt problems.
Often, student credit card issuers offer several incentives and “freebies” to students. Not all offers are false or traps, but it is essential to understand how they work. Restrict yourself to a single student credit card. The more cards you have, the chances of defaulting are greatly increased. Keep your credit card for essential items. Avoid using it for dining or partying around.
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