A credit card benefits a graduate, undergraduate, or even a non-traditional student. However, having one that satisfies all purposes is the best. Another reason is having a good credit history since it impacts other things like applying for a first apartment, car, or mortgage. This article contains a brief on student relationships with credit cards.
Here are some criteria for having a credit card as a student; the laws differ from regular cards. Here are things to know:
Age. you must be 18 years and above. And if you're below 21, you'll have to undergo additional scrutiny.
Income. You need to show dependent income for students below 21 or get a guidance co-signer. When you clock 21, you can fill any income such as freelance, part-time, parent money, and spouse or partner money. However, student credit card providers only accept students in college and those offering full-time or part-time in the university, graduate school, community college, and trade school.
Residency status. There is a minor difference; international students' cards have few features due to the need for a US Social Security number while applying for the card. International students can go for either Deserve® EDU Mastercard for Students, the Capital One Journey Student Credit Card, or the Bank of America® Travel Rewards credit card for Students.
Student credit card features are no different from regular cards, except they have additional student benefits. For example, students with the Discover a Student Card can enjoy a bonus for good grades and cash-back programs that reward you based on your spending. You can use the card at Amazon.com, stores, dispensaries, gas stations, PayPal, etc.
There are a few requirements for getting this card, and they are similar to getting regular cards. However, the extra student features require proof of enrollment status, and the general rule is that you must be 18 and above and meet the credit requirement.
If you're above 18 but below 21, you can either pay the credit or have a co-signer who could be your parent, or relative.
Students hardly have enough income to boost their credits, so they end up with bad credit history. Getting a credit card is a step in building your credit history by approving most things you want, like an apartment, a car, and other life aspects.
Opening a student account gets you a line of credit or spending limit, thus increasing your credit. However, keeping a low balance will limit your use of your card. The credit utilization ratio is calculated by how the student uses the card, affecting 30% of your FICO credit score.
The card begins to build your credit score immediately after you start making payments. It quickly impacts 35% of your credit score when you pay back on time.
You may have an unprecedented incident that needs immediate funds. A credit card might be of incredible help in such a situation. You can get the money and pay it back with a credit card as agreed. However, the limit or requirements depend on where you live, the type of emergency, etc. In such situations, having a credit card is a safe haven.
Rewards come with these cards when you purchase an item. For example, some cards offer cash back when you make a payment or remain on a minimum balance. Others may offer some percentage on every item you buy.
However, these good acts are ways to keep your spending. Be smart! Your credit card is only for emergencies or when all hope is lost. Otherwise, you may land countless debts, charges, interest, and fees.
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