This is part 3 of 4 in our comprehensive guide to student credit.
After you know what credit is and how to use it responsibly. you can understand how a credit card can help you (or hurt you).
Student cards are a special type of credit card that are only available to students enrolled in college or university. They’re designed for people with little to no credit, so these cards generally come with higher-than-average interest rates.
Many card issuers offer student credit cards in addition to their other options, and they usually require some kind of verification to prove that you’re in school.
Don’t assume that you need to get a student credit card just because you are a student – it is possible to get other cards with little or no credit, like secured credit cards. but you also may be able to get a regular credit card, especially if you have established some credit already.
Although the rates may be high, student cards are unique because they tend to offer better rewards and benefits than non-student cards designed for that level of credit. These cards provide a chance to easily establish your credit while earning a bit of cash back or points for purchases, as well as getting the extra shopping protections and insurances provided by card issuers.
Anatomy of a Credit Card
Credit cards have a number of features, including your personal information, account information, and information about the card type. Modern cards also include an EMV chip, and may put most or all of the personal information on the back of the card.
Benefits of Credit Cards
Credit cards can help you in many ways. They provide a surprising number of extra benefits, protections, and insurance plans for yourself and your purchases, and they’re a convenient way to carry money.
- Credit cards are cheap, and many don’t have annual fees.
- Interest can always be avoided if you
never revolve a balance from month to month.
- Responsible credit card behavior will improve your credit report and credit score.
- Credit cards provide great portable capacity – how else could you safely carry around $10,000?
- If you lose your credit card you can simply cancel it and call for a replacement. You can’t do this with cash.
- You are not held liable for fraudulent credit card use, so you don’t need to worry about theft as long as you report it.
- Many credit cards offer rewards in the form of points or cash back, providing a small discount for common purchases.
- Additional online rewards portals offered by some card issuers, like Discover Deals or Chase Ultimate Rewards. where you can find significant discounts at popular retailers.
- Credit cards usually provide purchase protection, covering items you buy against damage and theft for a few months, as well as extended warranties and insurance for travel and auto rentals.
- The better credit cards offer concierge services and truly valuable discounts and upgrades at airlines and in hotels, as well as exclusive access to pre-sale tickets and events.
What Makes A Great Student Card?
The best credit cards for students will build credit while costing you nothing, and actually saving you money through rewards and extra benefits.
Look for cards with:
- Lower interest rates (though your options will be limited without much of a credit history – if you never intend to pay interest, this is less of a concern)
- An introductory interest rate of 0% to give you time to get used to the card
- Special allowances like a pass on your first late
- Rewards like points or cash back for the types of purchases you tend to make
- Extra benefits like purchase protection and extended warranties
Q&A Video: What Happens To My Student Credit Card After I Graduate?