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FREQUENTLY ASKED QUESTIONS ABOUT STUDENT
CREDIT CARDS
If you are a student then you will
probably be wondering whether there are
any credit cards for students. Well
there is a credit card for students as
well. It is called as “Student Credit
Cards”.
These cards can give an early start for
a student to gain financial independence
and also become a responsible adult.
This is the reason why parents open a
credit card account for their child or
they even have the option of giving a
credit card that is linked to their
account itself. However, getting them
their personal credit card is a better
option. There are many FAQ’s asked by
the parents about the student credit
cards, some of which are listed below:
1)
Why is a “Student Credit Card” needed?
Because the credit card is in his name,
it helps to build his credit report from
a young age which will prove
advantageous to him. The longer the
credit history of a person is, the
better for his/her credit score. This is
the reason why, people who have started
to build their credit history early have
good credit scores. On the other hand,
if the student has a credit card linked
to his/her parent’s account then it will
not help the student in any way and also
has the risk of denting the parent’s
credit score when large debts are made.
Therefore, apart from teaching them to
be financially responsible and building
a good credit report, it also protects
their parents.
2)
What is the reason for the Credit Card
firms to provide special credit cards
for students?
Obtaining your first regular credit card
with a decent APR is extremely
difficult. You need to have a good
credit report to get a regular credit
card. Also, according to the credit card
companies, the students who want a good
future are more likely to pay their
credit card payments religiously than
the non – students. Also, since it will
be their first card the students will be
more loyal towards it. This is why the
credit card companies want to make long
term relationships with the students.
3)
What are the benefits of the “Student
Credit Card”?
Besides all the benefits that we talked
about till now, these cards also have
many other benefits. Some companies
offer cash back and reward programs.
Some other companies give discounts at
places which are useful to students like
bookstores, libraries and restaurants.
Not all the providers of credit cards
give these benefits; therefore it is
compulsory for you to do some comparison
of all the companies before making the
final choice.
4)
What different types of “Student Credit
Cards” are available?
When it is about “Student Credit Cards”
then the only two options that are
available are Unsecured or secured. This
works the same way as it works with the
regular credit cards.
5)
How is a student credit card different
from the Traditional credit card?
The primary difference is that the
credit limit for the student credit card
is extremely low when compared to the
traditional credit card.
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