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Student Loans Article
from: Student Credit Cards
Jacob Malherbe
Getting a student credit card for your son or daughter has many
more advantages than disadvantages; it's a first steep to
building credit while in college. Getting a student credit card
enables students to slowly build their credit, assuming they pay
their bills on time every month. Good credit history will help
them when they need good credit to apply for car loans and to
pass credit checks when they rent apartments or residences after
college. A basic credit building tactic involves getting a
student credit card and staying within the credit limit to
purchase clothing, school supplies, food and other essentials
while at school - and making prompt payments when the bills come
due. Make sure you son or daughter is responsible enough to use
it wisely. If not, you might want to hold of on getting them one
as their credit history will be with them for the rest of their
life. They need to learn about the importance of being smart
with money; this is one of the most important life-lessons that
parents can pass on to their children.
When choosing the right college student credit card, look for
the company offering a longer grace period so that you more time
to make payments for your expenses, before accruing any interest
on the balance. Credit card companies are anxious to acquire
student customers, since they know that a good borrowing
experience early on can earn them customers in the future. So
there is no shortage of offers for both secure and unsecured
credit cards in the mail. If you are a college student, whether
in your first year or getting ready to graduate, one thing you
need to start thinking about is your finances. One of the best
ways to start building up good credit is to go ahead and get a
student credit card. There are two types of student credit cards
that you can get. An unsecured student credit card does not
require that you pay any money up front. With an unsecured
student credit card, you can usually request a credit limit
increase after 6 to 12 months of timely payments of at least the
minimum due or more. There are a variety of great benefits to
having a student credit card.
Student credit cards have notoriously high interest rate and
finance charges can accumulate easily. Interest is charged at a
percentage of the overdue balance. Interest rates have been up
lately and the lower interest rate cards have been few and far
between, even to those with high credit scores. Your child will
learn about interest, particularly if he or she is paying the
bills. In fact, the only real difference between a student
credit card and a regular credit card is that student credit
cards have higher interest rates. Over time the interest keeps
adding up and eventually if the student is only paying the
minimum amount due they are in reality only paying off the
interest and their credit card balance is never going to be paid
off. Explain to your student that if they fall behind in
payments, the credit card issuer will increase their interest
rate. When credit cards were first introduced, they were a
pretty simple proposition: use your card for purchases, and be
charged a single rate of interest on your unpaid balance. Then
came the rise of the ATM (cash machine), and credit card issuers
realized they could lend money by allowing their cards to be
used to withdraw cash on account, and could earn more this way
by hiding away a higher interest rate for cash withdrawals in
the credit agreement small print. Not to forget the different
interest rate often charged for overseas use.
Students not only have tuition costs, but the cost of books,
meals, gas, cell. A credit card for college students also
provides you with the opportunity to learn how to budget your
money and handle your finances as well. For students who are
trying to get started early on achieving good credit, a student
credit card is a great option. Many students can be tempted by
what is apparently "free money", without thinking of the
consequences. Likewise, late payment fees can be an eye opening
experience for many young students. It's therefore essential
that students always pay at least their minimum payment due on
time and avoid late payments to build and keep a good credit
rating. Track Spending: Students can effectively track their
spending by reviewing and storing the monthly credit card
statements that will be sent by the credit card company. This
will help students understand the importance of budgeting and
record keeping.
About the author:
Jim Power is writer for the student loan information site
http://www.studentaides.com where there is more information to
be found on student credit cards. please visit
http://www.studentaides.com for more information.
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