What are the benefits of student credit cards?
Answered on Sunday, October 10th, 2010 by
James Williams

Student credit cards are an interesting strategy of many credit card issuers. Students belong to the part of the population that has a steady expenditure and usually some bills to pay. Invariably students get money from their parents or guardians which means, most of them have a decent income source. These are the reasons why a lot of credit card companies offer students in the campuses, credit cards with good incentives.

From the students’ perspective, there are quite a few benefits of taking the students’ credit card offers. To start with, those with no credit history find it very hard to get their credit card applications approved. Students are an exception to this. Moreover, without a credit history, the interest rates on the credit card or the loans approved for the customers are sky high. The first benefit of the student credit card is that it allows the students an opportunity to start building a credit while they are still in college. Most of them have a steady income in the form of pocket money and lot of expenses too such as phone bills, books, food etc. All this can be made to count by using a credit card and getting a history so that by the time they are out of college, they have a decent enough credit rating to go for credit card with good rewards and lower interest rates.

As soon as one gets a job, getting a vehicle and having insurance coverage are some of the expenses that are almost mandatory. But with a credit history built through students’ credit cards, you can get vehicle loans for lower interest rate insurance for lower premiums that those without a credit history would be able to get. The greater the expenses and the more consistency one maintains in paying the bills without letting the outstanding dues stay the better would be the credit rating.

If students can sensibly manage their pocket money through the credit cards and use the monthly expense report to keep a check on their expenses, they can build a good credit history which will help them with better offers in the future. Student credit cards usually need a guarantor, and so the credit history on the student credit card often reflects for the guarantor as well. It means that it can work both ways and while a good credit history will reflect well for both the guarantor and the student, a bad credit will also poorly reflect on both of them.

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