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All About Student’s Credit Card
March 16, 2020
Table of Contents:
- All About Student’s Credit Card And What Should You Already Have Prepared After Graduation
- How Can Any College Student Build a Credit Score
- 30% Influence (Credit Usage)
- 35% Influence (Payment History)
- 15% Influence (Age of Your Accounts)
- 10% Influence (Account Types)
- 10% Influence (Complex Requests Quantity)
- Best Credit Cards for Mature College Students
- If You Have a Car
- If You Like Shopping
- If You Like Traveling
- If You Like Cash Back in General
- If You Are an International Student
- How to Build Healthy Financial Habits
- Know the Contacts in Case of Emergency
- Develop an Action Plan to Improve Your Score Constantly
- Keep Your Identity Safe
- Use All Your Credits
- Check the Credit Score Regularly
- Use Different Credit Types
- Do Not Overextend Your Credit
All About Student’s Credit Card And What Should You Already Have Prepared After Graduation
Congratulations! If you are a college student and reading this article, it means that you have already started to build your prosperous future. The earlier you receive, understand, and implement the following information, the more opportunities you will have hereafter.
We, as a company striving for financial literacy, will help and support you in your endeavors. So, let us start with some basic financial processes that you will face every day.
When you need to buy something, you have to have a credit card and a good credit score. Building a credit history and improving your score are primary things that you will ever do. Obtaining a student credit card is the first step you take to become a part of the harmonious economic system. But let us come back to the establishing credit and the credit score.
A credit card for college students allows you to build credit the most simply. What you need now is to start gaining your points for your score by using your credit card.
As you will notice, some types of credit cards require an excellent credit history to apply for. Where can a financially blank student get one? The solution is quite simple! Ask your mom or dad to authorize you as a user of their credit cards. You do not even need to use it and make payments on-time, the responsible party is your parents.
This will gain you your first score and good credit history in advance. This approach is the only independent way to achieve a good score. Others that require your direct involvement are listed below.
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How Can Any College Student Build a Credit Score
To build a good score, you need to act like an RPG – complete quests and level up. A joke, but not quite. Each action influences, to a certain extent, your additional points (for detailed information study the FICO web site).
35% Influence (Payment History)
Always pay on-time. Each delayed payment will lower your score. You should not spend more than you are able to return.
30% Influence (Credit Usage)
The less you spend money from your college student credit card, the better your financial situation will be. The optimal amount to pay is no more than 20-30 % of your credit limit. You will gain additional points faster by using such a moderate approach.
315% Influence (Age of Your Accounts)
This factor will help you in the future if you start your credit history from the time you become a college student. It is believed that about seven years is the right age. By the time you graduate from college, your level will be appropriate enough.
10% Influence (Account Types)
It is not much, actually, but we need all the points to get better opportunities. 10+ is suitable for the beginning. Do not open all possible types of credit cards for college students at once. That is a bad sign for creditors.
10% Influence (Complex Requests Quantity)
For a college student, it is not relevant, but after graduation, you will face it. Each hard inquiry from a bank decreases your score and means you have financial problems. Soft inquiries, on the contrary, do not impact the credit score. They are requests by employers, your requests, or lenders checks.
Good credit is significant throughout your life, whatever you want to buy. So, let us see what kind of college students credit cards are available.
Nothing discriminatory like marital status, race, nationality, religion, or age is included in the FICO score. You can request a free copy of your credit report and receive a copy of the score every 12 months. Your credit score will be in a range of 300 to 850. The higher, the better. Excellent credit is when the score is above 720 points.
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GET STARTEDBest Credit Cards for Mature College Students
Credit cards for college students are designed in accordance with the low income of students. Usually, credit card holders restrict credit limits in cases when the only source of money is a stipend or part-time job. So, do not expect a high limit in the beginning.
However, the best credit cards for college students generally have reasonable APRs (Annual Percentage Rate or the interest rate of a credit card), low fees, and other benefits. Some even have specific cash-back programs. Two conditions you need to satisfy to apply for the best credit card for students: be 18 and have a permanent source of income.
Some students are concerned about high APRs. In the future, when you achieve good credit scores, card issuers will offer you lower interest rates. Anyway, there are credit cards with attractive APRs.
- Credit Cards from a Credit Union usually offer lower APRs from 8.24 % – 18.00 %. For example, try NFCU Platinum.
- Some cards may offer for a limited time 0 % introductory APR (about 1 – 1.5 years). It is comfortable for large purchases or to transfer a balance. Try HSBC Gold Mastercard.
- There are a variety of credit cards with a lower-than-average APR. Find applicable variants from 0% to 17%. As an example, see USAA Rate Advantage Visa Platinum.
Types of student credit cards:
See Also:
See If Our Program Is Right For You
GET FREE QUOTEIf You Have a Car
Range of possible benefits for college students:
- about 2% cash-back at gas stations (and even in restaurants), may be a limited amount
- about 1% cash-back on all other purchases
- $ 0 annual fee
- 14% – 24% regular APR
- no credit history needed
In some cases, there is a welcome bonus. For example, the minimum spending requirements are not fixed. Check this type from Discover, Mastercard, or Visa.
If You Like Shopping
Range of possible benefits for college students:
- gain bonus points at supermarkets
- gain additional bonuses while purchasing
- $0 annual fee
- 15 % – 25 % regular APR
- balance transfers have a fee
- good credit history needed
Usually, 100 bonus points are $1. You may spend it on Amazon, for example.
If You Are an International Student
Range of possible benefits for college students:
- $ 0 annual fee
- about 20% regular APR
- $ 0 foreign transaction fee
- no credit score needed
Such types of college student credit card are perfect for international students because no social security number is needed to get it. As an example, check Deserve Edu Mastercard.
If You Like Cash Back in General
Range of possible benefits for college students:
- cashback 1% – 1.5%
- credit limit $500 – $10,000
- 14.49 % – 25.49 % regular APR
- 0 fees
- no credit score needed
For example, investigate all the conditions from the Petal Cash Back Visa Card. It’s designed for people who don’t have a credit history and is ideal for college students. The main advantage is that the credit score is not required for the application.
If You Like Traveling
Range of possible benefits for college students:
- gain bonus points for each $1 spent on purchases
- $ 0 annual fee
- 16% – 25% regular APR
- good/excellent credit history needed
You may spend your bonuses on travel purchases.
It’s probably already become apparent that some types of good credit cards for college students do not require established credit history, but most of them do. We have already presented you with one way to start building your score and credit history in the background. There is one more way for students to do this.
You may have noticed that some cards called “secure.” These cards are designed for people without a credit history but have slightly different application conditions. This type requires you to make a deposit. It may be, for instance, only $500. It is needed in case you are not paying on-time. Your bank will take money from the deposit if there is a debt. This kind of payment scheme is less risky for financial organizations.
It is not the most flexible college student credit card, but it helps to start from scratch. After some time of exemplary financial behavior, the issuer will upgrade your card to an unsecured version. You just need time to earn trust.
How to Build Healthy Financial Habits
Well, as you can see, some mechanisms help you to start building your credit history. The variety of affordable credit cards may seduce you into trying all of them simultaneously. Do not be in a hurry. The issuing bank will send a hard inquiry each time you apply for new credit. And we want you to remember that hard requests reduce your score. There are more rules for you to follow if you want to have more opportunities and fewer problems with finances.
Know the Contacts in Case of Emergency
Three major credit agencies are important to contact if you’ve found any mistakes in your report. You should correct problems with the student credit card score as soon as possible. Here is the contact information:
- Experian National Consumer Assistance Center: Telephone 888-397-3742
- Equifax Credit Information Service, Inc: Telephone 888-766-0008
- TransUnion LLC Consumer Disclosure Center: Telephone 800-888-4213
Get Help With Your DEBT
get help nowDevelop an Action Plan to Improve Your Score Constantly
What maximum amount of money can you spend without a reduction in your score? Do you have a debt? Unpaid bills? When are you planning to settle them? How can you add points to your score? How many credit cards do you have? How many of them do you use regularly? Write something like a check-list for your credits. Make it your ritual to follow it and develop measures in case of deviations.
Check the Credit Score Regularly
The earlier you reveal anything odd, the faster you correct everything. Check your credit rating with each credit agency. Sometimes, such mistakes are made by the bureau or maybe someone using your identity.
Practice Safe Computing, Safe Banking
Install antivirus protection and a firewall to keep your information secret. Buy online only from trusted companies. Be careful with different e-mails and spam.
Use All Your Credits
In a while, you will apply for several credits. Do not forget to use all of them. Credit cards for college students you do not need will reduce your score.
Keep Your Identity Safe
Do not let anyone see your PINs. Report any suspicious activities and check your account each month.
Use Different Credit Types
One credit type is not suitable to establish a good credit history and score. Pay regularly for all your range of credits.
Do Not Overextend Your Credit
Monthly debt payments must be comfortable for you. If not, you will be at risk in case you lose your job or other income. Moreover, you will face problems connected with collectors. They appear when you delay payments for more than 90 days.
The second famous question after “should I get a credit card in college” is “what do I do if I have a debt.” The first and the main rule – do not take another credit to pay off the existing one! You are not the only person who can get into such a situation; so, do not panic.
You need to accept that you are in crisis right now. Do not downplay the problems because they tend to grow like a snowball. Now, when you are calm and able to act appropriately, try these next steps:
- Revise your spending. Stop wasting money on entertainment and anything, which is not a basic need. This will help you to save money to pay down debt.
- Send a request to all of your creditors to reduce your cards’ interest rates. That is standard practice for them, and in most cases, your application will be approved, especially if it is for the first time.
- Make a list of your debts and chose the highest interest rate. These you should pay down first.
- Suspend any charging while you are in repayment mode.
If it is already too late for the above steps, then you need to contact a specialized company like DebtQuest USA. We help consumers to resolve problems with their unsecured debt obligations. When the negotiation process between creditors and us starts, you can start saving money. Our goal is to show you that there is another solution besides bankruptcy.
DebtQuest USA educates American consumers on financial basics and the variety of options they have and teaches you how to build credit, rebuild it if necessary, and manage loans. Financial health is an integral part of living. Everyone should know not only about credit management but also how to save money for the future.
Unfortunately, most often, college students receive credit cards without knowing all of the details and underwater rocks. There is no such school subject like credit management. So, we decided to close this gap and let you thrive financially. However, the best way for you is to follow the rules we described, and then we will never have to meet each other!
Step by step build a positive credit history, do not forget to make regular payments, and you will reach other levels and credit limits. You will remember your first college student credit card as a crucial milestone in your personal financial development.
