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Changes in Credit Cards for College Students |
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by: Debbie Dragon
Under the new credit card regulations, college students will find it more difficult to get a credit card. Unless you are 21 years of age or older, you will now have to show proof of income or ask your parents to co-sign your application. Credit card companies have also been imposed restrictions that will not allow them to campaign on campuses like they have in the past. Student cards are also expected, under the new guidelines, to carry higher interest rates and have lower credit limits. So does this mean that college students should not use a credit card? Not necessarily.
Typically in the past, having a student credit card and using it responsibly is how young people started to build their credit score and their credit history. These things are very important, especially if in the future you hope to finance a car, mortgage a home or get a good rate on car insurance. Today many employers are even using credit scores to help determine who to hire.
Students should still consider getting a credit card. If they have employment, they should use that as their means to open an account. If they don’t, asking a parent to co-sign is the next best option. If you are unable to do either, then you can look into using a debit card or a pre-paid credit card. Both of these you would still qualify for and they will help to start building your credit. No matter which option you choose you should know the importance and responsibilities that go along with having a credit card.
Having good credit is essential and by using a student credit card wisely, you can begin to build a good credit history and score. If you do not use your card responsibly you could end up hurting your credit, which can take a long time to repair.
Always make sure you pay your bill on time. This is very important. You should also pay your bill in full each and every month. If you absolutely cannot do this the, at the very least you should pay more than the minimum balance. Never charge even close to what your credit limit is on the card. It is best for your credit score to charge 30% or less of what you total credit limit is.
Many college students find it easier to use their credit card responsibly if they develop a monthly budget. This is a good life skill to learn. To do this first determine your income and then your expenses. Make sure you include in your expenses all of your monthly bills including what you spend on food, entertainment, clothing, etc. This will give you a guideline of what you can charge on your card each month. If you stick to your budget and never charge more in any one category than what you have budgeted for, then you will always have the money to pay your bill.
One of the biggest pitfalls that college students have when it comes to credit card use is overspending on items that are luxurious. Sure it might be nice to have the 62 inch flat panel television, but can you truly afford it? One of the best things you can do is to avoid using your card to purchase unnecessary luxury items that you simply cannot afford.
Student credit cards do have additional benefits on top of building a good credit history. They can be convenient and safer than carrying cash and in case of an emergency they can be a life saver. Before choosing a card, search around for one that offers a rewards program that fits your needs. Credit Card rewards are also a nice perk.
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Credit Card Articles > Student Credit Cards > Changes in Credit Cards for College Students
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