Student credit cards function similarly to other credit cards, with the addition of rewards and features tailored to the requirements of students.
Approval for student credit cards is generally more straightforward, given that most applicants for their initial credit card typically possess a limited or nonexistent credit history.
Not as likely to get a personal loan or auto loan as a college student. But you might be able to get a student credit card. As long as you use your student credit card wisely, it can help you pay for things you need while you’re in school and build credit at the same time.
Features of Student Credit Card
These are some of the things that student credit cards can do:
1. Less credit available
Often comes with a credit limit of
It often has a validity time of up to 5 years.
3. Less expensive fees
Most of the time, EMI cards for students have cheap or no annual fees and no application fees.
4. Simple to Use
You don’t have to bring a bunch of paperwork; any student over 18 with a proper ID can apply for a student credit card.
5. Rewards and cash back
Student credit cards have many incentives, like cash back and prize programs. Some cards also give you discounts when you buy things or do deals.
How Does a Student Credit Card Work?
Credit cards for students work the same way as other credit cards. Someone gives you a credit limit, and you pay off what you owe at the end of each billing term. The bare minimum monthly payment is all that users are required to make, but because of interest rates, you’ll end up paying a lot more and may even get deeper into debt.
You might not have much or any credit history when you are a student, so student credit cards have smaller credit limits and higher interest rates than regular cards. But some cards, like the Discover it® Student Cash Back, have benefits that help students learn how to handle their money intelligently.
Most card issuers want applicants to prove they are studying at a government-recognized college or university. Users can keep their student credit cards even if they drop out or take a break from college, as long as the card provider doesn’t ask for proof.
Once students graduate, many credit card companies will give them a standard card with a higher limit. It’s a good idea to keep your student credit card open even after you get a regular credit card.
This will help your credit score by building your past and increasing the amount of credit you use. Student credit cards are great for people who don’t have much credit but want to reach the American Dream of earning their own money.
Many people are thrilled about student cards that don’t need a Social Security number because many college students aren’t traditional, and the Higher Ed Immigration Portal says there are more than 425,000 undocumented college students and nearly 1 million international students.
Advantages of Student Credit Card
Here are some of the advantages of student credits:
Build Good Credit
You might want to buy a car, rent an apartment, or build a house after you finish or even while in school. When you make these big purchases, lenders usually check your credit with these companies to see your creditworthiness.
Having good credit can help you get loans you want or need, but it can also make it harder for you to get that place you want. Why? When people rent, landlords want renters who pay their rent on time.
Credit cards can help you build good credit if you know how to use them wisely and not take on too much debt.
Accidents happen? Visit the emergency room. Do you need to get a new computer? Need to get home quickly? If something terrible happens that you can’t control, having a student credit card can help you out a little.
If you need to, you can pay for something right away, and as long as you pay it back on time every month, it won’t hurt your credit.
Convenient and Safer to Use
Credit cards are beneficial, and this is especially true in the modern world. It’s much easier to shop online with a credit card, and you’ll also need one to rent a car or a hotel room. Credit cards are also safer than debit cards because they protect you from scams better.
Keep an Eye on Your Money.
If you don’t have your money yet and need help figuring out how to spend it or where it goes, a student credit card might help you track it. How?
Your account lets you see how much you’ve spent over time and keep track of everything you buy. Another good thing? People who are parents or guardians of the student can also log in to most credit cards.
Disadvantages of Student Credit Card
Also, there are some disadvantages. Below are some of the disadvantages of student credit:
The interest rates on credit cards are usually above 20%, which is very high. At that rate, a young person could rack up a lot of credit card debt and only make the minimum payment. It would take them years and thousands of dollars in interest to pay off their purchases.
Having a credit card is like being able to use cash that you don’t have on hand. With just one swipe, you’ve spent money you don’t have. This could be a problem if you can’t monitor your spending.
What is the key? Don’t spend more than you can deal with. Put another way, don’t spend money you can’t afford to return.
If you think you might use your credit card to buy things you don’t need and then be unable to pay for them, you might think twice about getting a student credit card.
May Affect Credit Score
Also, remember that credit cards can help you build credit, but they’re not guaranteed. Paying your bills late can hurt your credit score a lot in the long run because your payment history is the most critical part of your FICO score.
Remember that another 30% of your FICO score comes from your credit utilization ratio, which is the amount of money you owe compared to the amount you can borrow. Your credit score could decrease if you keep running up big bills or never exceed your credit limit.
Eligibility For Student Credit Card
Before filling out an application for a student credit card, people must make sure they meet the following requirements:
- The person applying must be at least 18 years old.
- A person applying must be in college.
- If you have an auto loan, you can only get a student credit card from some banks.
- As long as the student has a fixed investment in their name and the amount is at least the minimum amount set by the bank, they can use that to get a loan.
- Some banks will give student credit cards to people with savings accounts with good average monthly balances.
Required Document to Apply for a Student Credit Card
During the entry process, you will only need to send in the following:
- Certificate of birth
- Photos the size of a passport
- ID from a university or college
- Proof of where you live
- PAN card
Applying For a Student Credit Card
It’s time to apply for a student card once you’ve thought about your finances and decided that it’s the best choice for you. To get a student credit card, follow these five steps.
Know How Good Your Credit Is.
You can determine what cards you can get based on your credit score. Getting a credit card is still possible even if you don’t have one yet.
Find The Application On The Site Of The Card’s Provider
Once you’ve chosen the card that works best for you, make any accounts you need and find the application for that card.
Try To Get The Card
Get together and enter all the information asked for on the application, like your name, address, and yearly income. If you’re unsure what to put in for your annual income, some ideas are your part-time job pay, scholarships, grants, and monthly allowance money.
Follow Your Application Details
It might only take a few days or a few hours to decide on an application. If you are turned down, the issuer must give you a letter explaining why.
Set Up A Way To Pay Back
Take note of the card’s payment due date if you get accepted. Ensure you always pay on time and in full to avoid extra interest charges. After that, the card will be sent to you in the mail.
With a student credit card, you can start building credit early on, making reaching life’s big goals easier. The most important thing is always paying your credit card bill on time and in full. Find out about different credit cards and choose the one that best fits your needs.