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| Credit Cards for College Students - Finding the Best Available |
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Student credit cards are geared primarily toward college students. But there are
many factors that can make credit cards for college students the right choice
for young people. So, it is very important for all consumers, not just students,
to first learn about each type of available card and then choose the one that is
most suitable.
Secured credit cards are one type of card for students to
consider. These cards are funded in advance of purchases and do not actually
extend a line of credit in the form of a loan. Rather, the cardholder sends
money to the card ahead of time and uses those funds to make purchases later. In
essence, a secured credit card is a bank account that does not earn interest,
but can be accessed easily with the swipe of a credit card.
Secured
credit cards for college students are a popular choice with many students and
their parents. One of the reasons for the popularity of these student credit
cards is the fact that it is not necessary to have a credit history in order to
receive the card. Of course, most college students have not yet had the
opportunity to build a credit history. Therefore, a secured credit card is an
attractive option. In addition, secured student credit cards typically offer
instant approval and do not require employment verification or even a bank
account in order to receive a card.
Secured credit cards are also
popular with parents because they can "load" the credit cards with as much money
as they see fit for their college student. Loading a credit card is simply
placing money on the card. Parents can generally choose to have money directly
added to the card with each paycheck. Or, they can send money through the mail
in the form of a money order or cashier's check. There usually are also banks
that will accept payments to be added to the credit card.
With a secured
student credit card, parents can essentially provide their college-going child
with an allowance to pay for food, school materials, or any other need the
student may have. At the same time, there is no risk of the college student
building a huge debt on an unsecured credit card. Once the money is spent, there
is no more for the college student to spend. Secured credit cards for college
students are a great way for parents to help teach their children to be
responsible and independent while still providing a little help along the way.
Another benefit to using secured credit cards for college students is
that many report to the major credit bureaus. In this way, the college student
can begin building credit without the concern of harming his or her credit
rating by being unable to pay the debt off.
For some college students,
secured credit cards are not the most attractive option. One reason is because
there tends to be a great number of fees associated with secured credit card.
Theses fees include application fees, processing fees, and annual fees. There is
generally also a fee associated with loading funds onto the credit card. Thought
these fees usually range from $1 to $5, the fees can add up over time.
Another reason secured credit cards may not be attractive to a college
student is because the student is truly on his or her own and unable to receive
financial assistance from the parents. Or, the college student may simply not
have the funds available to place on a secured credit card ahead of time.
No matter the reason, unsecured student credit cards are also a popular
option with credit cards. Credit cards geared toward college students are
specifically designed for individuals with little credit history. Often, the
Annual Percentage Rate (APR) on these cards is higher than average. Therefore,
it is best for the college student to pay off the card at the end of each
billing cycle whenever possible. As with secured student credit cards, unsecured
credit cards for college students go a long way toward building the student's
credit history.
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