Credit Cards for Students | An Expert Guide
Most of the major credit card issuers offer credit cards that are specifically designed for students. These cards allow you to use your time in college to build up credit so that once you graduate you'll have a good credit foundation. These student cards may require a co-signer, if you don't have income, and may offer rewards tied to textbook or entertainment purchases. Click on images below to get more advice on student credit cards from our experts.
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What To Look For When Applying
As a student or young adult applying for a new credit card, you should be focused on using it responsibly in order to build your credit history. Therefore, you should look for simple cards that are easy to use. Valuable features include email and text alerts that inform students when they have reached a certain spending level, or when their next payment is due. Another potential benefit is having a credit card from the same institution where you have a checking account. That way, all of your financial information can be easily found in one place, and payments become a simple matter of transferring funds between accounts, not issuing payments to a third party.
What To Avoid When Applying
In order to be approved for a new credit card, students who are under 21 must show their own source income, or have a co-signer who has income. However, it is wise to avoid enlisting a friend or classmate to be a co-signer on your application; the same goes for being a co-signer yourself on their cards. In addition, avoid focusing on reward cards at this point in your credit-building life. Since students and other young adults have the least experience using credit cards responsibly, and are the most likely to incur debt, these cardholders do not need to be rewarded for spending more money. Students with modest budgets have little to gain by earning rewards, and much to lose by getting into debt.
Should You Apply For More Than One?
It is not a good idea for students and other young adults to apply for multiple credit cards. The primary goal of having a student credit card should be to help you learn how to use credit responsibly while building a strong credit history. So there is little reason to complicate this process by applying for multiple cards. If accepted for multiple cards, inexperienced credit card users will then have to manage multiple accounts and make multiple payments each month. Applying for multiple credit cards will also ding your credit score, which is not beneficial to someone who is trying to establish credit.
When Is The Best Time To Apply?
Under the CARD Act of 2009, adults under the age of 21 need to be able to show proof of income before they can be approved for a credit card, and they should be prepared to manage a new credit card account responsibly. For most students, the right time comes after they have been an authorized user on their parent's account and have demonstrated the ability to control their spending. Only then should a student applicant work with his or her parents to find a credit card that can help build a strong credit history.
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