It’s that time of year when college students are packing up and heading back to get a year’s research. First year students are given many different warnings from their well-meaning and parents friends. They’re advised to concentrate on their research and not to get carried away with the variety of activities. Most of the time experience offers advice that is sound, but there might be some factors for college students to purposefully benefit from solid credit card supplies. College students might realize that there are some fairly impressive benefits for those using credit cards while there are risks for anybody who mishandles credit cards.
Three Major Benefits College Students may get from Credit Cards
Credit cards can be beneficial for college students when managed appropriately. There are three basic, but important, advantages associated with obtaining and using a credit card during your college years.
Establish a Solid Credit Report and History
Student loans might help have a positive influence on your credit rating and determine some credit. This is not likely to do you any good until when you have graduated from school and began paying them back. FICO has some fascinating criteria for determining your credit rating and among these is diversity of charge sources together with use of credit cards. 1 approach to enhance your credit score is consistently currently making payments. Credit cards can also help students who don’t obtain school loans demonstrate they are responsible financially. It builds a credit history that could help obtain their house or apartment on.
First Credit Cars can be a Financial Teaching Tool
Parents can sit down to go monthly statements over to assist them. As time continues on and the pupil becomes comfortable and accountable parents may back off and allow pupils to manage more of the financing. There are 3 tings students Will learn about financial theories from
Credit Cards are far safer for Online Purchases than Debit Cards
Very few students buy textbooks in the campus store these days, most of them are purchased online. Making online purchases can make you vulnerable. There are protective measures on credit cards and credit card companies don’t hold card holders liable if there are any fraudulent charges made on the card. Using a credit card is safer for many purchases and users don’t put their bank accounts at risk.
Common Mistakes College Pupils make With Credit Cards
Even though we’ve proven that learning how to control a credit card can be helpful for school pupils, there are a few common pitfalls which have to be prevented. For pupils that aren’t conscientious in the way they handle credit cards, there are a number of issues that can occur.
It can be tough to forget that you’re in fact going into debt when you use credit card. It is easy to swipe the card and head. But, even the smallest purchases may soon add up to a large amount of debt and you spend a lot greater than you’d intended. Moving over the limit set on a card can be costly and using the card will do you no good.
Spending only to earn the”Rewards”
It can be extremely useful to use. Rewards could include travel, merchandise or cash back. The rewards you get in return may not cost you a good deal more than unnecessary spending Though this is actually valuable.
Just Making the Minimum Payment
You’ll be charged interest when you allow your credit card balance to go over into the next month and you’ll be asked to make a payment. This is dependent on the credit card company and conditions you agreed to when you signed up. You’ll accrue interest, if you only make the minimum payment and it’ll cost you a lot more.
Cash Advance and Similar Characteristics
When making a purchase you have the option of receiving cash back. The rates of interest on these types of transactions are astronomical. It can be easy to find the money in hand without understanding how much it’s costing you in the long run.
Strategies for College Students and Credit Cards
There are numerous things you can do to make certain you have the best credit card experience potential. You want to reap the benefits of having one rather than so many have found themselves in, fall in one of those drawbacks. Here are some tips
- Choose your card carefully.
- Use secured credit cards.
- Ensure you fully understand the conditions of the credit card.
- Check about what fees are linked to the credit card account.
- If the card includes rewards make certain you understand how they work.
That Credit Cards are Best for College Students?
Credit cards can be a valuable instrument for a school student when they’re used responsibly. All credit cards aren’t created equal nevertheless and some firms design cards to benefit from college students. We narrowed it down, after searching through numerous options. Listed below are our top 3 options:
- Discover it ®for Students — Good Grades Rewards — This charge card Discover is designed specifically for use by college students. It provides 5% back on plenty of purchasing categories, up to $1500 spent at a quarter, and 1% back on everything else (unlimited). One of the characteristics that are beneficial for students include no penalty interest rates and they waive the fee for your payment that is late. There are no charges for transactions that are foreign if you travel.
There is a 0% interest rate on purchases made in the first 6 months, and then a variable rate of interest of 12.99 to 21.99 percent. New members make double the money back rewards in the initial year and you get $20 cash back every school year that your GPA is at least 3.0.
- Citi Thankyou® Preferred Card for College Students — This card developed for college students offers 20,000 bonus points. In addition, it offers also a ThankYou point for purchases and twice the points for dining and entertainment purchases. New sign-ups receive 2500 bonus points after the card is activated, after spending $500 from the first three months. The first 7 months offer an introductory 0% APR and will go to 13.99 to 23.99% variable APR then. There is also no yearly fee for this card.
The Citi ThankYou Card is outfitted with chip technology that increases its security and allows it to be used. If your card has been stolen or used you will not be liable.
- Journey Student Gains from Capital One ® — This is the only card Capital One has that’s designed specifically for students. There is not an annual fee, and benefits don’t have any expiry. Pupils get 1% cash back on every purchase and another 0.25% back for making monthly payments on time. For those who manage the card responsibly, this is a total of 1.
There’s not a limit set for earning money back and it could be redeemed at any given moment. Students may also set it up so the card redeems automatically. Once you create 5 straight monthly payments on time, you can find a credit line that is higher. So you can watch your credit score you can also get a free credit report.