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.

On the other side, if students spend more money with their card, sooner they will be incapable to pay the bill which will affect their credit rating. If the issuer goes after the co-signer to pay the bill, it will also affect co-signer’s credit rating as well. Therefore, students should always aware about their budget before they start using the card.

To summarize, student credit card is good to have. For high school students or college students, this card is a mean of freedom and at the same time also teaches responsibility. It comes in handy during emergencies, which is a good reason to invest in them. If your son or daughter is in school now, you may consider looking into it for them. It will help them to build a credit score which is good for their life in the future.

Credit Card

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.

Stricter Guidelines on Youth Credit Cards

Currently credit card companies have bombard student campuses, wafting the scent of “free” money under the noses of cash strapped students desperate for food and alcohol. Free pizzas, hats, t-shirts, basically any gimmick the financial institutions can use to lure the impressionable youngsters are fair game. Not for much longer though as the government has taken steps to restrict the ability of persons under the age of 21 obtaining a credit card. From February 22nd gaining easy access to a credit card (and free pizzas) will end as three motions are set to take affect:

* Anyone under 21 wishing to have a credit card must have proof that they can comfortably pay off any potential debts or have at least two adult co-signers to vouch for them. Sending pre-screen credit card offers to anyone under 21 will also be outlawed.
* Universities, colleges and alumni associations will have to disclose any contractual agreements they have with credit card companies which allows them to access student and alumni contact info.
* Students who share their account with an adult will have to obtain permission from parents or guardians to have the credit limits increased. Campus promotions by credit card companies will also be banned.

Building a Solid Financial Foundation

Bearing the burden of debt early in life can severely hamper your chances of owning your own home, applying for loans or simply just be able to save for later life. While the new laws will sour the candy coated temptations of credit cards they won’t eliminate them. That’s why it pays to develop good financial habits early and avoid any unnecessary stress in the future. Here are three tips to help you build a solid financial base for the future:

* Discipline Yourself – Don’t learn the hard way that too much debt is dangerous. Learn some self control and don’t be sucked into impulse buying. It is far better to save your money and buy the killer pair of sneakers or iPod with cash rather than credit. Racking up debt on unnecessary items will only serve to plunge you deeper into the abyss when you need your credit card for something urgent. You’ll also end up paying interest if you continually delay your payment which means that must-have dress won’t be quite the bargain you initially thought it was.
* Keep on Track – Noting down your expenditure, however basically, will not only be good practice for when you have to manage large payments, such as mortgages, but allow you to know your limits. The biggest problem young people face, especially when they have the luxury of a credit card, is not knowing where to draw the line. Not knowing your boundaries will leave you clueless as to where your income starts and where your expenditure stops. Make sure you always keep track of what’s coming in and, importantly, what’s going out.
* Emergency Back-up – Having a savings pot on hand to help you out in a crisis is invaluable. Imagine what the country would be like if we didn’t have the police, the fire department, paramedics etc etc on standby when something goes wrong. Putting some money aside each month, no matter how small, will be a blessing when you find yourself in desperate need of some funds.

Making sure you understand how to manage your money is essential if you’re going to survive in today’s economic climate. By not falling prey to the temptations of the credit card companies you and sticking to good financial practices should be all you need to enjoy a prosperous life.

by: Debbie Dragon

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.

The limits are low. No college student will be offered many thousands of dollars in credit, especially if they don’t have a steady source of income. Many student credit card limits are $500 – $1,000. While that’s nothing to sneeze at, it’s unlikely that such an amount will cause financial ruin for the student.

It’s never too early to start building a credit history. The length of one’s credit history is an important part of their credit score. The longer an account has existed, the better. If your child gets a credit card in college, they’ll already have an established history by the time they graduate and look into purchasing a car or home.

Help is available. Have you talked to your kids about debt? Maybe you’ve tried to be a good role-model; or, perhaps you’re an example of what not to do with credit cards. Either way, your kids have been paying attention. Plus, many campuses are now offering – or requiring – financial management courses for college students. This is long overdue, and there are high hopes that such classes will lessen the temptation to abuse the plastic.

If your child is nearing college age, have a frank discussion with them about debt. Explain the difference between good debt (debt that brings a return on investment) and bad debt (going into debt for consumables or rapidly-depreciating items). Most of all, teach them the importance of living within their means and not viewing credit cards as ‘free money’.

by: Janna Weiss

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.

Use the Internet

You can go online to look for student credit cards. These cards might have a higher-than-average interest rate, but they are more readily available to college students, who frequently have little or no credit history. You can compare deals on student credit cards right here at CreditorWeb.

Check With Your Bank

Do you have a checking account? If you’ve been doing your banking at the same place for six months to a year, you might have built up some credibility with the bank. Assuming you’ve kept a positive balance and haven’t bounced checks, you could convince your bank to issue you a student credit card on the strength of your financial history and current employment.

Ask Your Parents

It’s not a glamorous solution, but it will get the job done: ask your parents to add you as an authorized user on their credit card account. You will be able to make purchases with the credit card, and the account history will show up on your credit report. Just be aware that your parent’s credit problems can affect you as well. For example, if they max out the credit card or miss some payments, your credit score will suffer along with theirs.

Easy credit isn’t as easy as it used to be. Luckily, there are still steps you can take to find a good student credit card deal. Do a little research and don’t be afraid to ask your bank – or your parents – for help. A solid credit history will open the doors to all the things you’ll need in the future.

by: Janna Weiss

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.

For example, Bank of America has an $8.4 million contract with Michigan State, and a $25.5 million contract with the University of Michigan. JP Morgan Chase is also contracting with about 25 universities. These deals grant the banks access to students’ names and addresses, and also kick some money back to the universities whenever a student signs up for one of the cards.

Critics say that this system is setting students up for spending beyond their means, but proponents insist that the contracts bring in much-needed revenue to the schools. A Bank of America spokesperson stated that student credit card limits are kept low – an average of $2,500 – to encourage responsible spending. Arizona State also partners with Bank of America to provide educational seminars about getting out of debt and staying debt-free.

Targeted marketing is nothing new, but the universities that pair up with credit card issuers are obligated to divulge contact information for their students, alumni, staff, and even people who hold season tickets to college sporting events. These pairings provide marketing opportunities for banks and sources of revenues for struggling campuses. And if you’ll recall the past agreements between colleges and student loan companies, you’ll remember that these tactics are nothing new.

Still, vocal opponents, such as Representative Carolyn B. Maloney of New York, call the sharing of student’s private information “outrageous”. Student groups worry that colleges have no incentive to teach students about the very real dangers of misusing their credit cards. After all, the schools receive money when students sign up for the cards. Steering students away from cards they can’t really afford doesn’t seem like a good way to keep those revenues rolling in.

At the end of the day, it’s up to the students themselves to learn about debt, responsible spending, and reasonable credit card terms and conditions. Once they’ve educated themselves, they’ll know how to say “thanks, but no thanks” to pushy credit card marketers – even those with a college’s seal of approval.

by: Janna Weiss

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.

All of the methods of buying lunch without cash may be giving students mixed messages regarding making purchases, though. When the child doesn’t physically hand over $1.75 or whatever the price of their lunch is, do they understand that they are still in fact paying for it, when they swipe their ID card or scan their fingerprint? It most likely depends on the age of the child, but there are some concerns that giving a child an ID card or alternative method for paying for their lunch reinforces the idea of using credit to buy – “buy now, pay later” – regardless if the parents have deposited money onto the ID card or lunch account for their student, it’s not what the student experiences when they go through the line to pick up their lunch. Is it possible that cashless lunch systems at schools will continue to send positive messages about buying on credit?

Some people would say that’s an invalid concern, or one that doesn’t require much thought. But as the nation continues to struggle with people spending more than they can afford using credit, it’s worth considering how moving away from a cash based lunch system for our young people might affect their attitudes regarding spending as they get older.

It’s easy to understand the benefits of these cashless lunch systems. First of all, for children who come from lower income families and receive a reduced lunch or free lunch program – using alternative methods to pay for lunch ensures it’s a private matter. The other students in line will not know whether the child paid a quarter or two dollars for their lunch if it’s a swipe of a card, giving an ID number or scanning a fingerprint to pay for the meal.

Secondly, paying with these alternative methods reduces the possibility that a child will lose his or her lunch money on the way to school, spend it on snacks instead of lunch, or get it stolen by another child – but that’s only if the system allows parents to deposit money to the account online. In some school districts, parents have to send a check to school with their children for it to be deposited to the child’s lunch account. The checks can still be lost on the way to school, but at least it would reduce the possibility of someone else taking it and using it.

Another benefit of cashless lunch systems include giving parents the ability to see what their youngster is eating for lunch. Many of the new school lunch payment systems allow parents to log in and deposit money into their lunch accounts, and even view what the students are purchasing. Did Junior eat a healthy lunch at school today, or did he buy cookies, a bag of chips and a Nutty Buddy?

by: Debbie Dragon

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.

Just a few short years ago, it was not only next to impossible to give a teenager a credit card, but you would be considered a little on the crazy side to do such a thing! Times have changed though, and there are various credit cards on the market for teenagers that parents can use to help them learn the basics of financial responsibility.

Credit cards for teenagers include features like parental control and digital ‘allowances’. It may be sweat-inducing to give your teenager a credit card, but a credit card makes a good educational financial experience for your child- before it’s too late for you to help them become financially responsible individuals:

Teach Them About Good Credit. With so many adults currently struggling to re-establish their credit or increase their income so it’s easier to keep up with their monthly payments, it’s never too early to teach teenagers how to manage money. Teaching them at a younger age can prevent them from over spending once they’re on their own. Nellie Mae claims that the average freshmen college student has over $1,500 in credit card debt; and once a student realizes how easy it is to “get what they want, now”, it becomes habit to use credit cards to buy the things they want while in college. If the teenager enters the adult world with solid money management skills, they’re less likely to get in over their heads in debt.

Your Options. If you’re not concerned about your teenager establishing a credit history at this time, and simply want a way to teach the basics of money management, you can look for a prepaid debit card with a Visa or MasterCard logo. Some of these cards may have annual fees or transaction fees- which just gives you another opportunity to show how using a credit card isn’t the same as buying with cash. You could also sign your teen up for a checking account with debit card; or put them as an authorized user of a credit card account you already have- or open a new credit card account with a low limit and put your teen on as a cardholder.

Gives Teen Access to Emergency Money. When your children become teenagers, chances are they are starting to spend more time away from you and on their own or with their friends. Sometimes they may have a need for cash- if a car breaks down and they need to be towed off the highway, or for long distance phone calls for example. Having a credit card in their pocket will make it possible for them to handle an emergency that requires access to money and can give you a little more peace of mind.

If you decide you are ready to teach your teenager the basics of money management and credit, make sure you spend some time investigating the various options available to you before choosing an option. Regardless of which option you choose, you’ll want to be sure to spend adequate time with your teenager and not expect them to know what to do with it on their own! Try using a service like Citibank’s Credit-Ed program: http://www.citi.com/us/cards/cm/student/index.htm

by: Debbie Dragon

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.

Some students might pass right by- but probably the majority of students are interested in the give-aways enough to stop by the table, and with about 50% of these students signing up for credit card offers, you can guess the marketing is effective.

It’s not that student credit cards are a bad idea- it’s what typically happens to these wet-behind-the-ears undergraduates when they catch the credit card fever. Most of the time, student credit cards offer low credit lines of $500 or $1000, and it’s very easy to charge up to your maximum limit quickly. As students are enjoying the buy-now and pay-for-it-later experience (no pun intended) they’re also quick to sign on a new dotted line for a different free t shirt or a free dinner. After all, what’s another monthly payment of $20 going to do? What many college students aren’t realizing (until much later) is that their $500 credit cards are costing them two, three… sometimes four times or more in interest when they make just the minimum payment each month. Worse, if the student has a poor financial management system and misses a payment here or there, the late fees and increased interest rates from non or late payments will result in ridiculous amounts of money being thrown out the window.

Students are going to college to create a better future for themselves; getting a higher education and a degree that is meant to earn them a higher income than if they hadn’t gone to college. When these students rack up thousands of dollars in credit card debt, they graduate into the real world with damaged credit scores and the inability to keep up with their payments. Before they’ve even landed their dream careers, some of the students have created such a mess out of their credit scores that they’ve got to work two or three jobs to make ends meet.

Colleges all over the nation require a certain set of educational courses- regardless of what you plan to major in. Most universities require an English or writing course, a science, math and foreign language course as part of every course of study’s major requirements. Probably another course to require of all students would be a basic financial management course. Unless a student has been taught personal finance and money management from their parents, college is often the first experience a student has with handling their own finances. Why do we assume a student has this knowledge without being taught?

by: Debbie Dragon

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)
* Rarely are there any annual fees
* The cards are usually fairly easy to get, provided your student hasn’t encountered any troubles with credit before
* The credit limit might be lower than a regular credit card, at first. But once the student has established themselves as a responsible creditor, the limit will usually rise accordingly

It’s unusual for students to have to seek out these credit cards. Credit card company representatives often appear on college campuses, particularly at the start of each semester, and offer “freebies” or other incentives if the student simply applies. And here’s where the trouble comes in. Many students, who before have never had credit, often apply for more than one card, get approved for more than one card, and quickly find themselves in debt.

This can be dangerous; to think of a student falling into debt before even graduating college, but it’s fairly common. If your student is heading off to college, you can give him or her some tips for using a student credit card. These might include:

* Only use the card for necessities, not for party supplies or dining out
* Pay the bill in full each month (you might want to oversee this for a few months to make sure your student is being responsible)
* Remind them that if they pay the bill late, they might be hit with a higher interest rate
* Try to discourage them from applying for credit cards simply because they want the freebie – whether that’s a Frisbee or a gift certificate for dining out
* Teach your child some basics of good money management

Now, if your student is willing and able to handle the credit card responsibly (or you plan to pay the bill), there are many advantages to acquiring a student credit card. In fact, for many students, using the student credit card will be preferable to using a standard credit card. The advantages include:

* The lower interest rate can mean slightly lower payments if you must revolve the balance for a month or more
* Getting a credit card in their name can give many students a sense of independence and responsibility
* Students have the opportunity to develop good credit habits and a good credit rating before they even graduate college
* If you’re the parent, it can give you peace of mind to know your student has a credit card to use should an emergency arise.
* If you acquire a credit card that offers rewards, your student can use the card to purchase books, groceries and other supplies and quickly earn rewards
* You can keep your student’s credit use separate from your own, since no cosigner is necessary.

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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.

While some 529 rewards credit cards require that you link your credit card account with a specific 529 plan, others allow cardholders to designate any investment account to have rebates deposited. If you don’t have children or are unsure if your child will want to attend college, you might decide to have rebates deposited into another form of investment account.

Most Popular 529 Rewards Credit Cards With No Annual Fees

Fidelity 529 College Rewards Card: issued through MBNA, this credit card provides a 2% rebate on all purchases. The maximum you can earn each year with this card is $1,500. Your card rebates will automatically be deposited into a 529 plan that is managed by Fidelity. People living in New Hampshire, Delaware, Arizona and Massachusetts are currently eligible for the

Fidelity 529 College Rewards Card.

Citi Upromise Credit Card: issued through Citi Bank, this credit card provides a 1% rebate on all general purchases. The maximum you can earn each year with this card is $300. When you use the Citi Upromise card at specific locations, including Mobil and Exxon, you’ll get 2% of your purchases in rebates, with no annual maximum; and a full 10% on grocery and drug store purchases without annual maximum rebates. You can link your Citi Upromise credit card to any 529 plan that is managed by Upromise Investments Inc.

GHESP/Futuretrust MasterCard: issued through Juniper Bank and managed by TIAA-CREF, this credit card offers 1% rebates on all general purchases with no annual maximum rebates. Most people link their cards to a Georgia 529 plan, but you can also use Futuretrust’s self branded credit card and link it to almost any investment or bank account to receive your rebates.

BabyMint College Savings Card: issued from MBNA, this credit card provides a 1% rebate and no maximum limits. You can link your credit card with any 529 plan or investment account and have the rebates automatically deposited.

Using credit cards is almost a necessity in today’s economy. If you have discipline and can pay your balance off in full each month, it is a great idea to use one of these 529 or investment plan rebate credit cards to help your spending work for you. If you have to spend money, you may as well use a credit card that’s going to help you deposit money into an investment or 529 plan as well.

Rebates from credit cards that are placed in your 529 plans are treated the same as a direct cash contribution, meaning you will count them as a gift when it comes to taxes. You can deposit $12,000 annually into a 529 plan, so having the rebates from credit cards deposited doesn’t pose a problem for most families.

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