Student Credit Card Application Tips
Getting a credit card when you’re still a student, either in high school or in college (though to get a card on your own you must be 18 years of age), is a bit of a conundrum like the age old chicken and the egg question. When you apply for a credit card, they will want to know your credit history before making any decisions. Chances are, however, that there is no credit history. You are still much too young to be making any mortgage payments or other items that could appear on your credit report. If you are still in college then that probably means you have yet to repay any loans, so that too will not be available. On the other hand, without the credit card, you do not have many other means of developing a good credit history. What to do?
For the most part, there is not much for you to worry about. Credit card companies are all about starting people on credit cards while they are young (whether or not they are ready for one). It doesn’t matter that you have no credit history or that you only make $100 a week at your part-time job. In fact, you’ve probably already received several credit card offers. So which should you take?
First of all, no matter what anyone says, read the fine print. Ironically, even many adults fail to do this and subsequently find themselves in undesirable financial positions. The fine print, albeit small and a little technical, will have all the information you need about the card. What the interest is, what fees there might be, what the credit limit starts out as, and if it is a rewards card you seek, how rewards are earned and distributed.
Going online is the best method of credit card research. It makes it much easier to compare cards from different companies. Once you have a good idea of the type of card you want, it narrows down the number of cards you will want to look at. It is not always necessary to get a card specifically designated as a student card or college credit card. Some basic consumer credit cards have lower APRs than others, but it will be the company that decides on your APR and not you.
Still, it can’t hurt to seek out a low APR card because over time you can always call the company and request a lower APR – as long as you have been responsible with your card and created a good credit history. Looking for a rewards card can make finding a low APR much trickier because most reward cards, student or otherwise, come with high APRs. This is because credit card companies expect people to want to spend more money using these cards in order to get rewards more quickly. This can lead to a high balance, and when coupled with high interest rates, it means plenty of extra money coming the company’s way.
When considering a reward card, it is best to know your own limits. Do you plan to pay off your balance each month? What do you plan to use your credit card for? Emergencies only? Groceries and other necessities? Gasoline money? Each one will affect the type of card you want. In this way, you can choose the card that will benefit you the most in terms of rewards.
For any credit card application, take your time and consider all possible options. Don’t just jump in with any card just because you get a free T-shirt with the application.