Student Credit Cards
There are special student programs for credit cards that offer students special deals, cash back incentives or free gifts for opening a bank credit card account. There are often low interest student credit cards available for first time credit card holders. Most offers for college students include instant approval with low APR.
Students should only use credit cards for emergencies or for purchases that there is money set aside for in order to avoid getting into credit trouble with the first credit card owned. Bills should be paid on time and students should create budgets that they know they can afford. It’s an important lesson to learn how to manage money when in college since there usually isn’t a lot of money coming in from part time jobs or scholarship programs.
In order to maintain a good credit score when a student (since starting off with a bad credit score can really affect your finances later in life), students should keep these tips in mind:
- Always pay more than the minimum payment so that you avoid excessive interest charged.
- Always make your payment on time. Send it in a week before it’s due or pay your credit card online several days before the payment is due.
- Always stay far below your student credit card limit. Stay under 50% always.
- Do not use one credit card to pay of another. This gets you deeper into financial trouble.
- Only charge what you can afford. You do not want to end up in a situation where you’re working more and studying less in order to make credit card payments.
- Do your research to find the best credit card offer that you can.
The Fair Credit Billing Act (FCBA) says that a credit card owner is only responsible for up to fifty dollars of fraudulent charges. Also, most major credit card companies including American Express, Visa, and Master Card offer liability policies that cover would complete reimbursement for fraudulent credit card charges.
Prepaid student credit cards are often a good way to start using a credit card because you can only spend the amount that is in the account. Prepaid credit cards also help students build their credit.
Student rewards credit cards offer cash back or other rewards like travel mileage for spending done with credit cards.
If done correctly, students can use credit cards to build an excellent credit history. A good credit score can offer many benefits right out of college and later in life.
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