Student Credit Card Tips: From Choosing A Credit Card To Building Your Credit
It may seem like it’ll be difficult for a student to get a credit card. But this is no longer the case.
These days, it is easy for a student — or, clearly, anyone who is of legal age — to get a line of credit even without a credit history.
Of course, it all boils down to choosing a credit card that can help you build your credit.
Options for students
There are two options available for students without an existing history of credit and looking for Student credit card offers: secured credit cards and co-signed credit cards.
Both credit cards will give you a credit history (provided that your bank reports your credit activity to the major credit bureaus, and they most likely do).
Secured credit cards require you to have a deposit on your account that’s more or less equal to your credit limit. It serves as a collateral; the deposit doesn’t get depleted when you use your credit card.
Co-signed credit cards require the user to have a guarantor, a “co-signer.” If the cardholder ends up not paying the debt, the co-signer is liable and will have to pay for it.
Building the credit
Choosing student credit card offers is actually just have the battle.
When you already have a student credit card, you need to build your credit so you can move on from student credit card offers to more flexible (and rewarding) credit card deals.
Here are some tips:
Have one card — a not a single more than that. Maintaining one credit card should be enough. It may be tempting to have more than one, so you can shuffle between two or more cards when you have exceed your credit limit for one card. But this is counterintuitive, especially if you are working to have good credit. This will reflect on your credit history, and obviously having more than one card says something about your ability to maintain your finances, especially if you don’t pay all of the cards on time and in full.
Pay on time. Which goes without saying — always pay your credit card bill on time. A big chunk of your credit score will depend on your payment history. This means you should only charge for what you can pay for at the end of the month. Building credit means proving that you have the capacity to repay your debt. Clearly, paying your bills beyond their due date does not say you have that capacity.
Mind your credit limit. Even if you can pay your debt in full every month, it will reflect well on your credit history if you don’t reach your credit card limit every month. Maintain a distance between your expenditure and your credit limit. Some say you shouldn’t use more than 30 to 50 percent of your credit every month.
Pay in full. When you’re building your credit, it makes sense not to leave any balance when you pay off your bill. Which means you should always pay in full; if you won’t be able to pay in full at the end of the month, don’t use your credit card.
There’s a ton of student credit card offers you will come across with but know which one to grab. Learn more at https://www.texasattorneygeneral.gov/files/agency/financialliteracy.pdf.
Student credit card offers can help you start build a good credit. Read our tips, reviews, and guides so you can make sound financial decisions. Visit www.creditcarddeals.co.