Student Credit Cards

Building and establishing credit

Starting your credit history is an important step in establishing your financial life, and starting that history sooner can be beneficial, since mistakes such as missing a payment will stay on your credit report for 7 years. The impact of negative items, such as a late payment will decrease over time, and quickly learning from mistakes and becoming literate in credit will help to ensure your credit is in good shape when you are ready to rent your first apartment, finance your first car, or even purchase your first home.

Options for student credit cards

Depending on your credit history, you may have multiple options available to you. Whether it is finding the right credit card or other options to help you establish credit, starting and maintaining your credit early can help you as you move forward and towards the financial goals you wish to achieve.

• Before you start college: When you have no credit history, a good option before you start college could be to become an authorized user on your parent’s or family member’s credit card account. When you become an authorized user on someone else’s credit card, payments made would appear on a credit report in your name. As long as payments are made on time, the history would appear and benefit your credit report.
• Secured credit cards: Another option for someone with no credit history is a secured credit card, since some issuers do not require any credit history during the application process. Secured credit cards require deposits into a bank account and act as a sort of collateral, but in other aspects behave as a normal credit card, where you make charges up to a defined credit limit and have balances, along with interest. Making sure to read the terms and conditions of a secured credit card can be beneficial in helping you understand the actual costs, since all secured credit card offers can vary in terms of APR and fees.
• Credit cards: Typically, people with very good and excellent credit have long credit histories, among other things which have contributed to their high credit ratings. So, as a student and on your road to establishing credit, you may find that your credit standing might be lower on the credit scoring range. However, there are still many opportunities for individuals with fair credit, and even credit cards with rewards and promotions that could be within your reach. One of the most important things in this part of your journey is to realize that credit should be used responsibly and applied for when you need it.