We all know that standard credit cards are popular among people with regular income to buy something with the luxury of paying for it later. But for college and university students, who do not have any source of income, lack credit history, and cannot qualify for standard credit cards, having this luxury is just a dream.
To help support students manage their financial needs, several banks and financial institutions offer fully functioning credit cards tailor-made to meet the student needs. Student credit cards can help students build a successful financial future by enabling them to manage their finances.
Why Do Students Need A Student Credit Card?
Student credit cards work like standard credit cards and they do come with certain unique features like lower credit limits, no annual fee, higher APRs, and other rewards. Apart from these, there are several reasons why students should get a student credit card.
1. Building A Good Credit Score: A student credit card can help students create a good credit score. Students need to spend within their credit limit and make payments on time to keep the interest rates lower. Having a decent credit history could be of great help for them when they apply for future credit, such as loans or mortgage and improve their chances of getting a job. Plus, it builds their creditworthiness in the eyes of banks.
2. Earning Rewards: Like standard credit cards, student credit cards offer students several perks such as reward points, cash back, or discounts, which they can use for various purposes.
3. Getting Lower Credit Limits: These cards come with lower credit limits, unlike standard credit cards. It reduces any possibility of students getting stuck in unnecessary debts. Also, these cards limit students’ spending behavior.
4. Learning Money Management Skills: Student credit cards allow students to manage their finances in many ways. For example, a lower credit limit will enable them to develop responsible payment habits. Additionally, to make students stick to these habits, few banks charge penalty fees for spending more than the credit limit.
5. Managing Emergency Expenses: A student debit card can be a useful tool for students to cover their emergency expenses.
How Can Students Qualify for A Student Credit Card?
Though it is much easier for students to get approved for a student credit card, they still need to meet the minimum qualification requirements, such as they must:
- be aged 18 or over
- have a bank account with their chosen card provider
- have a college or university ID
- have residential address proof
- be registered on a course, and
- have availed an education loan
Conclusion
A student credit card is beneficial for a student in many ways. With perks like cashback and discounts, students can save a lot of money, use them to enroll in an online course, buy educational resources, pay bills, book a hotel, rent a car, refill fuel, and more. The basic concept behind student credit cards is to enable students to learn good money and credit management skills. By responsibly using student credit cards, students can easily manage their personal and emergency expenses and build a good credit history before graduating.
