Three Tips For Receiving the Best Student Credit Card
The tips for getting the best student credit card aren’t that different from getting any credit card. You need to make sure your credit report is clean and do your homework on what the credit card companies are offering. One of the main issues to understand about credit cards is that they are all different. The fees and interest rates and terms for credit cards can be miles apart, so it is important that you know what you are signing up for. You have to look at the options to get the credit card that’s right for you.
Tip Number 1 – Your first Credit Report
As a student, you may not have much on your credit report. But you still need to make sure that what is on it actually belongs to you. This is a great time to look at your reports and start paying attention to your credit rating. In this day and age, the credit reports are sometimes looked at by prospective employers. Having erroneous information on your report can do lasting damage. So before you consider applying for any credit card, take a look at what has been reported on your credit history.
Interest rates and terms for credit cards will be dependent on your credit rating or the credit rating of your co-signer if you are under 21 years old and will need a co-signer to get a credit card. The first step should be making sure that your credit report is as clean as you can make it.
There are several services that offer you to see your credit report for free. One of these services is https://www.annualcreditreport.com/cra/index.jsp. Once a year this central site allows you to request your free credit report from all three of the consumer credit reporting companies. These three nationwide companies are Equifax, Experian and TransUnion. Once you’ve looked at your report you can usually submit online any changes or discrepancies that you find.
It isn’t unusual to have erroneous information on the credit report and often you can send in the discrepancies through an online process. It will take about ten minutes online to fill out the information and get the reports. Then as a student with little or no credit it should just take you a few minutes to review the reports and verify information. If there are mistakes or corrections to the report it can take up to thirty days for the incorrect information to be verified and removed.
Tip Number 2 – Comparing Companies and Cards
Some things are easy to compare. Like annual fees. The card either has them, or they don’t. Interest rates are more difficult. Is there an introductory rate that only lasts for six months or so, then goes up? Is it a set interest rate, or variable? If the rate is variable, what is it tied to?
If you are looking at and comparing introductory offers, make sure you know how long the introductory rate lasts and what the rates and terms will be once that time has expired.
Tip Number 3 – Other Options
There are other options besides a “regular” credit card. Depending on what you need, your credit history or how you plan to use the card one of these other options might be something to consider.
Secured Credit Cards
One option for students might be a secured credit card. This type of credit card requires a security deposit on the account in the amount of the credit limit. The deposit is held in a special savings account that will accrue interest, but can’t be accessed by the account owner.
The credit card can be utilized for any purchases, including for online purchases. After the card holder has made consistent on time monthly payments for a year, the card issuer will generally re-evaluate the account and release the security deposit. At this time the card holder will be assigned a credit limit.
Prepaid "Credit-Cards"
These cards are not actually credit cards but are a type of stored value card. There is no credit check for these types of cards and no interest is paid. The parent or student simply makes a deposit to stores money on a card.
The cards can be used for online payments and purchases and they are branded by Visa, Discover or American Express. These prepaid cards can be used just like any credit card. The money stored on the card is reduced each time the card is used. Make sure you understand any fees associated with the pre-paid card.
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