Posted by Taxes Made EZ Inc

Understanding a Student’s Credit Card

Understanding a Student’s Credit Card

A student's credit card helps students pay for college needs of students without income. It is also a good idea for a student whose credit score is not enough for a regular credit card.

Unlike regular credit cards, the student's credit card comes with fewer rewards, higher APRs, and lower credits. If used the correct way, a student’s credit card can help build your credit score and manage your finances.


Important reasons to get a credit card

As you progress in life, you will need a good credit history to get things like a mortgage. With a better credit score, you have a better chance of securing such deals. This is why credit cards can improve your credit score provided you know how to manage them. 

You can also pay for items of over $100 with your credit cards. With the protection of section 75, you will be refunded if something does not add up. There is also the option to make deposit payment using credit cards. This will qualify you for services like repairs, non-delivery, retailers going bust, etc.

If you are disciplined enough to know how to manage a student’s credit card properly, you will learn proper money management skills that will be pretty helpful later in life.

Like a student bank account, student's credit cards do come with rewards and cashback. With a sound repayment plan, you can benefit from this.

It is also a lifesaver in time when you are broke with a lot of expenses before you. However, you are better off using the 0% overdraft. This will translate to a longer time to pay back what you borrow. Also, you will be spared from fees and interest.

A credit card is incredibly useful. Unfortunately, not everyone is fit for it, especially those that struggle to manage their finances. The only wise way to use a student’s credit card is if you can manage the repayments.


Factors to consider in applying for a credit card

  • It is a bad idea to spend more than what you can pay back within the 0% interest period.

  • Before applying, check your credit history. If need be, try and improve your credit score.

  • Making too many applications within a short time frame will reduce your chance of being accepted. Only go for cards that you think you will be successful with, and that will serve you best. 

  • Be clear on the annual interest rate (apr). This is the extra charge for not paying your full balance every month.

  • Be clear on the terms of all promotions like repayments and minimum spending.

  • Make sure you are aware of all penalties that come with the card. This involves penalties for going over your credit limit, withdrawing from cash machines, and spending abroad.


Normal or student’s credit card: which should you consider?

There are credit cards specifically designed for students, although they do not come with mouthwatering offers. However, getting it is not difficult. The credit limit is small, which reduces your chance of amassing debts. The apr is higher hence costly, especially if you do not entirely clear off your balance.  

There is also the concern of what becomes of the credit card after graduation. The debts, obviously will not disappear and you can continue with the card. However, switching to a regular credit card will be easy if you have been a good spender. 

With a standard credit card, you get a couple of options. For the extremely disciplined folks, you can have interest-free spending with 0% spending. You can also have all your regular shopping with a 0% card while your interest packs up in a saving account.

With that, you are better off buying only what you need, and keeping the money until you clear your balance. You are better off with full repayment before the interest comes in. This comes down to planning.

For people that like rewards, with a point card or cashback, you can earn various things like money back, store vouchers, air miles, which will be a good idea if you are loyal to a particular store.

Bear in mind, however, that the rewards only make sense only if you are diligent about getting your balance off every month.

 

FOR MORE INFORMATION ON Taxes Made EZ, Inc. OR TO MAKE AN APPOINTMENT WITH US, PLEASE CALL: (856) 232-0958 OR CLICK ON THE BLUE BUTTON, BELOW.


THANKS FOR VISITING.



Taxes Made EZ Inc
Contact This Member