Posted by admin on Oct 14, 2010 in
Student Debt Consolidation If you're new here, you may want to subscribe to my RSS feed. Thanks for visiting!
What kinds of credit cards are best for college students?
The cost of education in addition to every other commodity is soaring high day by day. If you have incurred too much debt, if you have heavily used your credit cards, it is time for you to think of a solution to get out of these overwhelming debts.
One of the best ways to get out of the debt mire is to go for a credit card debt consolidation. Once you start paying off your debts and your credit improves, you can try getting student credit cards to avoid incurring huge amount of debts in the future.
Types of credit cards for students:
1. Prepaid credit cards – Prepaid credit cards are a hybrid of the debit card and a traditional credit card. You are required to put money into the account before you can actually use it.
You can spend only the amount you had put into the account. Unlike debit cards, your prepaid credit card is in no way linked to a checking account. It is possible to get prepaid credit cards with no fees or may be low fees.
There are various other advantages of a prepaid credit card, which are as follows:
- 1. Parents can easily transfer balances to a prepaid credit card account
- 2. They are mostly a no fee one or a low fee one
- 3. There are no overdraft fees and late payment fees
- 4. Like credit cards, prepaid credit cards can be used anywhere without the risk of incurring debt
However, prepaid credit cards do not help you build your credit and cannot be used for emergency purposes if not loaded with cash previously. Moreover, prepaid credit cards do not offer cash back.
2. Student credit cards – These are normal credit cards designed specifically for students and generally come with low interest rates. Moreover, if you as a student handle your card responsibly, you will be able to get cash back and other rewards.
Advantages of student credit cards:
- 1. You can earn cash back and other rewards
- 2. Helps you in building credit
- 3. No-fee offers too are available
- 4. Can be used in times of emergencies
However, with the introduction of the Credit Card Act of 2010, you may need a co-signer to get a new credit card for your needs. If you miss payments on these cards, it will definitely hurt your credit and the interest rate on the card can increase too.
If you miss payments on your credit cards you will fall knee-deep in debt. In this situation you may need to go for credit card debt consolidation through balance transfer.
However, you may not qualify for a credit card debt consolidation balance transfer with bad credit. Thus, it is important to use your cards lightly according to your monetary condition.
By Martha Jackson
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