College and university students should always look into the benefits of having a student credit card at their disposal, particularly a Visa or MasterCard student credit card as these are the top two brands of credit card that are accepted universally at most retail stores, ATMs, and for online purchases.
A student credit card is a credit card that is specifically formulated for the needs of students. The premise behind a student credit card is to help students to establish a positive credit rating. There are many advantages to having a student credit card, but students should understand credit cards thoroughly before applying to have a good knowledge of the best way to manage their credit card accounts.
Understanding Your Credit
A credit card is, in many ways, like a loan. The credit card company will furnish you with a line of credit for you to make purchases with, and then you repay them either in full or in monthly installments. It costs money to have a credit card, because credit card companies charge interest and fees that must also be paid back in addition to the credit that you use.
Credit cards for students are a bit easier to obtain than a traditional credit card that a non-student would apply for because students have not had a chance to make any mistakes with their credit and are thus considered creditworthy. Even those student credit cards that are issued with low amounts of available credit provide stepping stones for the student to use to have great credit when they are finished with their degree.
Worry-Free Payment Method
Having a credit card is a privilege that can allow you to make purchases without the worry of keeping cash on hand, or without having the extra cash at that very moment to spend. Student credit cards also provide you with a great way to pay your bills or shop online (without asking Mom or Dad to use their credit cards).
In an emergency, having a student credit card is much easier than writing a check or obtaining a money order, and credit cards are safer to carry than cash because if they are lost, you can easily report the card stolen and curtail your losses. You certainly cannot do that with cash; once you lose a wad of cash, you can be fairly certain that you will never get it back. For those students needing to make major purchases (like a laptop computer, for example) a student credit card gives the student an affordable and instant way to make easy monthly payments.
Building A Good Credit Score
Building your credit with a student credit card simply makes good sense. Good credit is important not only to allow you to access the money you will need to borrow in the future, but also because many potential employers now do a credit check as part of the employee screening process. This is particularly true of any government position or positions that require trust or handling money. Further, if you want to rent an apartment or condo, most landlords require that you submit to a credit check as well before they will rent to you. As you can see, having good credit and a good credit score is no longer just about borrowing money or buying a home (although you must have good credit to do those things too) but can spill over into other areas of your life as well.
The ideal student credit card has a low rate of interest, or perhaps even offers zero interest on purchases made and paid for within the same billing cycle. You should also look for a Visa or MasterCard logo on your credit card so that you can be assured that most vendors and retailers will accept your card. Also, you want a card that has low or no fees associated with carrying it, as many student credit cards may charge an annual fee.