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Check out the following benefits and how to find the best credit cards for college students.
Benefits of Having A College Credit Card
Your main goal as a college student should be to use a credit card to build your credit history, so that when you graduate, you have a good credit score that will let you obtain a loan for a newer car or buy a house. Building good credit as an undergrad may also help you obtain the necessary alternative school loans when you need them for grad school, since some of those are only offered based on your credit.
To build your credit, find a card with an extremely low interest rate and use it to make a purchase each month that you pay off the subsequent month. By doing this, you will build credit without going into credit debt before you are able to work full time.
What Cards Are Available to You
- Refundable cards-There are credit cards that work to help you build credit and get used to managing credit debt but are actually loaded up front with money. The great thing about these cards is that Mom and Dad can also put money on them, an ideal situation for college students away from home.Local bank or credit union cards- If you have a checking or savings account at a local bank, you may be able to get a credit card that also functions as a debit card for your bank account. Often, the credit line on these cards acts as back up funding in case you overdraw your account, protecting you from overdraft charges.
- Reward cards- Many credit card companies offer you the opportunity to earn rewards in the form of points that can be used for merchandise or cash back for the purchases you make with the card. Look for one whose rewards suit your needs -- earning frequent flyer miles may make it easier to fly home to see your parents at Christmas.
The best card for you will very much depend on your situation and circumstances. Regardless of which credit card you choose, be aware of the risk. Don't use a credit card unless you can afford to pay the payment. Understand that whatever choices you make with your credit card now will be on your credit report long after you graduate college, so charge responsibly. Be sure you read and understand your credit card agreement.
