Credit Cards For College Students
Posted at by NReed on category FinanceIf you are a parent of a college student it may be a source of great anxiety. If you’re a college student getting ready to begin the next stage of your life, it’s another piece of freedom that you have been waiting all of your life to gain. What is it? Your very first charge card account.
College student credit cards have been the subject of much debate and controversy. Some may argue that charge card account companies are directly targeting the less than responsible spending habits of many college students. They are offering students a credit card knowing that money will most likely be made in finance charges, late fees, and high APRs. Additionally, colleges and universities often receive kickbacks from the charge card issuers for allowing them to set up booths on campus, send offers to students and parents on the university mailing list, and give students the offers they cannot refuse. Colleges and universities selling student information directly to credit card account companies is sometimes seen as a conflict of interest.
Others argue that learning good financial habits and hopefully build a credit history should begin as early as possible. If a charge card with a responsible limit is established, it may be the perfect time to build a positive credit report, especially when most students aren’t bogged down with other financial obligations like house and car payments and the expenses associated with having a family.
If you believe that college student credit cards are right for your child, there are a wide variety of options available in two main categories. First, if an actual unsecured charge card account is preferred, very attractive cards geared towards students can be found. Some give extra rewards points for the types of the typical college student purchases such as books, music, movies, and food, plus normal points for all other purchases.
The APRs on these cards are at a manageable level, but like any credit card, students should practice good credit habits by regularly paying the full balance at the end of every billing cycle. Many cards have an intro rate as low as 0% and no annual fee.
There is another class of college student credit cards that aren’t technically charge card accounts but represent an option with less risk of abuse or irresponsible spending habits. Parents can take out a prepaid credit card where a set balance can be added to the card at selected intervals. This unfortunately does not build a credit history but prevents the student from getting overwhelmed with huge charge card debt.
Many of these prepaid debit cards come with helpful perks including no annual fee, free automatic bill pay, and free e-mail and text messaging alerts with information on the card’s remaining balance. Additionally, places like Western Union and many others serve as convenient places where money can be added to the card.
Legislation protecting college students from unlawful credit card practices has been proposed but if you believe that a college student charge card is a good idea, many options are available. As always, going to one of the many popular websites that compare the top charge card offers is the best place to get started.
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