How Does A Student Credit Card Work? Let’s start by first knowing what a student credit card is about. A Student Credit Card is made with the assumption that the student does not have a credit history or it is limited.
Or likely the person it’s having a credit card for the first time. Furthermore, student credit cards often do have bonuses or rewards programs made specifically toward the lifestyle of the student. These cards also sometimes do have higher penalty fees and lower limits than other credit cards.
How Does Credit Card for Students Work?
With a normal credit card, you can spend money up to your normal credit limit. In as much as you make the full balance paid off by the due date each month, you won’t pay interest on what you have borrowed. A student Credit card can help you sort out your finances, by granting you access to delay payments on purchases made for a certain period.
What is a Student Credit Card?
the main purpose of a student credit card is to help you start building credit. They work like your regular credit card, except they offer lower credit limits and small to no incentives. You do not necessarily have to be a student for you to qualify for a student credit card, depending on the issuer.
How to Apply for a Credit Card as a Student
The process that involves applying for a credit card might vary depending on how old you are and your current financial standing. If you are under 21, and you are a student who wants to apply for a credit card then follow the steps stated below:
- First, you need to research the best type of student credit card for your needs
- Learn about its requirements
- Get relevant proof that you are enrolled in school. Some banks or credit card companies might confirm your enrollment in an eligible school through the national clearing house.
- Gather co-signer information (Co-signer is responsible for making missed or defaulted payments on the account) and show proof of income.
Above 21
If you are above 21, and you are a student looking to apply for a credit card then follow the steps stated below:
- First, you need to research the best type of student credit card for your needs
- Learn about its requirements
- Acquire the relevant proof of your income or assets.
- Obtain relevant proof that you are enrolled in school. Some banks or credit card companies might confirm your enrollment in an eligible school through the national clearing house.
- Then submit your application using all the required documents.
For you to apply for a student credit card, you are expected to provide proof of a steady income from a part-time or full-time job or have a co-signer (a person who is over the age of 21 and has a steady income who takes responsibility for your late or missed payments) join you in the process of the application.
No Credit History
As a student, you may not have an existing credit history, which makes it difficult for banks to give you feedback on your financial expenses. You’ll notice also that the terms and conditions often are not as favorable as the one of a credit card of a full-time employee that has a good credit history.
However, if student credit cards are used properly it can be a cheap or even cost-free way to borrow money and add a bit more flexibility to your finances
Student Credit Card Benefits
Almost all the major banks and many other card issuers now offer credit cards for students. Here are a few common benefits of Student Credit cards;
- It helps in building credit history while studying.
- A low credit limit to ensure that things are in control, usually around 500.
- Credit Interest-free period up to 56 days to pay off debt before beginning to pay Interest.
- Great Rewards and perks, with special offers.
Finally, if you’re prompt in your payment stay within your credit limit, and pay off what you owe before striking time, the Credit card for students can assist you in developing good financial habits.
Tips to Manage Your Finances
As a student, there’s a great need to manage your finances. It begins with setting your budget at the beginning of the semester. Your loans plus any savings or income you may have, minus your tuition fees, rent, mobile phone bills, and any regular essential needs. The remaining is for your feeding, transport, and social activities for the rest of the semester. As a student, you’re entitled to lots of discounts and deals. Use them to get what you only need.
Do not assume you need a Student Credit Card. Note that, they’re not free money instead, see it as a convenient way to shuffle money around. If you’re not able to repay what you owe, you could get into more debt and in the end, damage your credit score.