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Student Credit Cards Offer Future Financial Opportunities

Published on December 14, 2012 by   ·   No Comments

creit cardsCollege students are exposed to many new experiences, including the wonderful  adult world of financial responsibility. As a student, you will likely need  extra money to help pay for some of your expenses. You may even be in the market  for a new car or a better apartment as you get older – but unless you have a lot  of money saved you’re going to need a good credit history and adequate income to  qualify for student credit cards.

Opening a credit card is the first step in building your credit history, and  there are many options available while you’re in college. Student credit cards  not only help you out in the short-term with extra money, but they also have the  potential to open more financial opportunities in the future. Before you apply  for every card out there, it is important you understand all the benefits and  potential consequences of opening your first account as a student.

Assess Your Situation

You may want a credit card, but can you actually afford one? While the money  you use on cards allows you to make purchases even if you don’t have the cash on  hand, you have to pay it back with interest. Not having a steady income can make  this process difficult. Plus, under the Credit CARD Act of 2009, the bank has to  verify income information for applicants under the age of 21. This means that  you must have some form of steady income that does not include parental support.  If you don’t have a part-time job yet, you may need your parents to co-sign on a  card for you.

Available Offers

There are numerous student credit cards available, so you should take your  time to choose the best ones. While some cards offer student-friendly awards  tailored to your school, these might also carry higher interest rates. Your best  bet is to choose a card with a relatively low interest rate and no annual fee.  If you can’t get a low APR, try to pay the card in full every month to avoid  interest fees. Keeping your card purchases low enough to pay in full each month  is ideal for avoiding long term debt that can cause serious financial problems  when you graduate, too.

Exercise Good Credit Habits

Credit can be helpful in college, but cards can adversely impact your credit  score if you don’t use them responsibly. Many students find themselves in  Catch-22 situations because they don’t have credit history to apply for the best  cards, but they still need to build their scores in order to qualify for  financing from any source. One way to accomplish this is by making timely  payments on one card at a time. It can take a couple of years to establish a  decent FICO score, but only a few months to wreck it. Always pay your bills on  time and contact the lender if you are in need of an extension for making your  payment.

Beyond College

Graduation comes with even more exciting changes. If you have maintained a  good credit history during college, you will likely find more financial  opportunities after you gain your diploma. These can include getting a new car,  buying a house or going on a well-deserved vacation. As a student you know that  nothing ever comes easy, and good credit is no exception. Establish credit  responsibility early on so the good habits will stick with you for life.

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