Modern society is one depends that on the convenience of credit cards, and this situation has resulted in the creation of a very highly competitive credit card industry. Although there are many credit card companies on the market who have outlined strict guidelines relating to credit cards for students, there are many institutions throughout the world who are giving high school and college students the chance to begin their credit line with a student credit card. Student credit cards are used the same way as any traditional credit cards although there are more requirements and restrictions on them to ensure they are used responsibly.
Almost every company which offers the student credit card requires a co-signer to sign the application with the student as collateral. This means that if the student becomes unable to pay his or her bills or has several missed payments, the bank or financial institution will turn to the co-signer. Although having a co-signer as a backup creates peace of mind for the student, students should understand that they are responsible for the payments at all times.
In order to help lower the risk rate for the credit card issuer, the APR for student credit cards can be a bit higher than for any traditional card. The spending limits for these cards are also lower as student cards are meant for emergency usage only. Their limits range from $250-$800 for the average credit card issuers today. Although this is a low limit compared to other cards, it is a great and safe way for students to learn the responsibilities of credit and to begin establishing their own credit.
For students who are planning on making large purchases with their credit card, getting a student card is a great idea. By using their student credit card to make large purchases, students are greatly increasing their credit standing and building a stable and reliable credit report that can help them get larger loans and lower rates in the future.
Learning how to manage money and financing is something that only a limited number of students learn before they become working adults with adult loans and credit cards. Having a student credit card is a great way for students to learn the importance of credit and how to handle it responsibly before they apply for larger and larger credit lines. By learning these skills at a young age, students may be learning how to avoid a lifetime of debt.
Of course just like any other credit card, if students start spending more money than they are bringing in, they will find themselves in a difficult financial situation. If the student is unable to make timely payments and the issuer is forced to go after the co-signer for payment of the outstanding balance and interest charges, this will have a negative effect on the student’s credit. The student must understand that his or her actions not only affect themselves but others as well.
Overall, student credit cards can be a great asset if they are used responsibly and as a teaching tool instead of as an expense card for binge shopping sprees. Whether you are a student or the parent of a student, you will discover that student credit cards are great for giving you the peace of mind that comes from knowing you will be prepared for any financial emergency that may arise.
Marc Ilgen is an internet entrepreneur and author. He runs a website called Credit-Card-Apply-Online-Here.com to help people apply online for a credit card. His website also lets viewers compare some terrific credit card offers for students and apply online for a student credit card.
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