Today, credit card is playing important part on every transaction. You can shop for merchandise and pay it with your card. It’s that simple. It is not only for people that already have a job but also for high school and college students. Student credit card have the same features as a traditional one, but they do come with certain strict requirements that other cards do not have it. Most credit card companies will need a co-signer as collateral or a form of insurance before they release a card for the student. This is to be believed as a back up and a peace of mind for the issuer if something goes wrong with the payment.
The student credit card interest rate or APR is usually higher than regular one. This is to minimize the risk for the company. The limit is also ranging from $250 – $800. This is very common because most students have not established any credit history. Even though the limit is very low but it still helps students build a credit. A student credit card can be used as a stepping stone to build credit and establish a good credit history. If you can manage your using of the card then you have a chance to get high credit card rating and this is in turn will allow you to get higher loans in the future.
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Many adults who find themselves in financial troubles as they get older generally have some capital, or at the very least, financial experience to fall back on. This isn’t to say that dealing with debt problems is any easier when you’re older, it certainly isn’t, but growing up with debt problems is a serious problem facing the modern youth.
The weight of debt is a noose that is extremely difficult to shake off and if you fall foul with your finances at a young age the effects can be devastating. A recent study by Sallie Mae, a student loan company, found that 84% of undergraduates now owned at least one credit card, which is an 8% rise since 2004. The average spends for an undergrad has also increased since 2004, from $942 to $2,200. The most striking figure unearthed by the study was that 82% of the students fail to meet their full payments each month. These statistics haven’t gone unnoticed and with the government having major concerns over the borrowing potential of students in the future they have decided to implement some major changes.
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There’s been a lot of scrutiny and criticism aimed at college-aged kids and credit card offers. Many college students are already accumulating debt through student loans, and some of the marketing arrangements between banks and college campuses feel downright slimy. But should you panic when your child brings home their first credit card? Here are a few reasons why college kids with credit cards might not be such a bad thing after all. In fact, you might want to encourage your child to get a couple of credit cards while they still can.
The cards are easy to get. In fact, experts agree that the college years are the time when credit is most easily available. Banks offer credit to students with the hope that these young people will become high-earning professionals who don’t pose much of a credit risk. Extending a line of credit to young adults with bright futures is practically money in the bank.
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In the past, college students were considered easy targets for credit card marketing. Faced with the promise of easy credit (and maybe an iPod thrown in for good measure), college students, on their own for the first time and eager to taste financial freedom, signed up for credit cards – even if they were unemployed and had no apparent way to pay off their debt. If they ran up the balance on one card, it wasn’t hard to find another creditor waiting with card holder agreement in hand.
Now things have changed. For the first time in years, college students are having a hard time getting approved for credit. While some may consider this a good thing, students need to have access to money in the event of an emergency. If an emergency savings account isn’t available, credit cards are the number one alternative.
If you’re a student who wants to apply for a credit card, follow these three tips for finding and obtaining a card that meets your needs.
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You’ve heard about the lengths credit card companies will go to in order to attract young student borrowers on college campuses. Maybe you’ve even been targeted by these companies yourself. Their endeavors can feel a bit smarmy; after all, a free t-shirt is nothing compared to the damage a reckless cardholder can do to their own credit score. And many of the deals offered on college campuses are nothing to write home about. Sure, you might get an iPod, but you’ll pay for it in high fees and interest.
Some student groups have gone so far as to classify these marketing tactics as predatory. Why, then, are banks still allowed to peddle credit cards to students? Because they just might have a contract with the host college.
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Around the country, many schools have begun cashless purchasing processes in the cafeteria. There are a variety of methods used to keep track of the purchases, from student ID cards that operate like a debit card to fingerprint systems to simply giving the cashier your name or student number to have your purchase deducted from the account.
Just as retailers around the world having to accommodate the preference of consumers to swipe their cards rather than pay using cash – and accept credit or debit cards for everything from a pack of gum to McDonald’s cheeseburgers, our school systems are following suit and an increasing number are using credit card-like systems to pay for lunches.
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Most credit cards designed for students were created for college students – but can a high school student get a credit card? The short answer is: YES. The long answer would involve a lot of discussion!
As teenagers, many go out and get their first jobs, or are otherwise earning income from allowances or babysitting. It’s the perfect time for parents to help them learn the basics of money management; which is something many families skip over; leaving graduating high schoolers to move on to college or the “real world” with very little real world knowledge of finances.
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Students entering their freshmen year of college are typically starting a new chapter in their lives, filled with hundreds of first-time experiences and opportunities. For many, it’s the first time they’ve lived on their own. For some, it may also be the first time they had to do much for themselves, from laundry to planning their own meals. For all college students, the temptation to sign on the dotted line for various credit card offers can be too much to overcome!
As the summer fades into fall, all around the country you’ll see little tables popping up with enticing offers- “Get a free T-Shirt when you apply for our credit card”; “Choose a free CD”; or “Free Pizza when you apply!” The little credit card “kiosks” are littered all over campus in some cases, with the most marketing savvy setting up shop in front of the pizza shop where students can get their free pizza for applying, or in front of the dining hall or center of campus where students tend to socialize in between classes.
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When your child begins college, they are bombarded with any number of offers and good deals, but one that many students are particularly interested in is the student credit card.
These credit cards, offered by most major credit card companies, provide a slightly different package of offers than mainstream credit cards. But the end result is the same – your student can use the cards for a wide variety of expenses and possibly even earn rewards or cash back bonuses.
What makes a student credit card different? Depending on the issuer, there can be a wide array of differences between the cards that are designated for students and those that are sought by others. Let’s look at a few crucial differences:
* The interest rates are often lower
* There is usually no minimum income (and no cosigner either)
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A 529 plan is a savings plan that is used for saving towards future college costs, and offers a variety of tax-advantages over other forms of savings. It makes sense then, that families with children are opting to use credit cards with rewards that are tied into 529 plans. This style of rewards credit card is best used when the card owner uses the 529 rewards card to make all of their purchases, and then watches as the rebates drop into the 529-college savings account.
Considerations for 529 Rewards Credit Cards
If you are unable to pay off your entire monthly balance each month, you will not benefit from a 529 rewards credit card. The interest you pay on the card will almost always be higher than the amount of rebates you earn if you carry a balance from one month to the next.
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