Students and Secured Credit Cards

by : Mary Wallace



When you enter college, you may soon find the need to apply for student credit cards. There are a few reasons to get a student credit card. The most common reason to get a credit card is for emergencies. Emergency medical care, vehicle repairs, unexpected school expenses and avoiding starvation may all be reasons to apply for a student credit card. Another reason is simply to start building your credit.

Most students don't have a credit score or any credit history because of their age. There are special offers from credit card companies out there to combat the problem of constantly being rejected for credit because of an insufficient credit history. Many of these student credit card offers require that you be enrolled in school to qualify. The idea is that you are receiving an education that will later allow you the funds to repay any debts that you incur during college. This makes you less of a risk to the credit card company than someone your age that isn't in school. It is assumed that you will make more money in the future than those who aren't furthering their education.

Qualifying for a student credit card is easier if you are currently employed. If you are not, then you still may qualify for a secured credit card. A secured credit card is a card that has a deposit account attached to it. This means that you will be required to deposit money to get the card. You will usually be asked to deposit up to five hundred dollars. This can usually get you a credit limit of between five hundred and one thousand dollars. The credit limit is the amount that you can charge up to.

Secured credit cards show great responsibility and can build your credit very quickly. Basically it tells the credit card company that you have the foresight to save money and use it to build your credit, investing in your future. You must make every payment on time and pay more than the minimum amount that is due. If you don't, then you run the great risk of damaging your credit very early in the game. Consider your credit card the catalyst for proving your responsibility. Don't run your credit card up to the limit unless it is absolutely necessary. If you do, then pay it back down as soon as possible. Holding a balance that is close to the limit can hurt your credit score.

Shop around and choose wisely when selecting which card you want to apply for. Apply only for the ones that you really believe you'll be approved for. Watch out for extra fees or high annual percentage rates. Take advantage of special deals offered to students, but disregard them if they turn into high rates and high fees after the promotional period is over. Be responsible and always make your payments on time. Proving yourself now can lead to the best deals on major purchases in the future. If you do well and keep your credit score high, then you'll enjoy special deals and the best interest rates for years to come. Your student credit card could be the start of your successful financial future.