The cost of education in addition to every other commodity is soaring high day by day. If you have incurred too much debt and if you have heavily used your cards, it is time for you to think of a solution to get out of these overwhelming debts. Although there are a number of ways to get out of debt, finding the best credit cards for college students is a good start in keeping that debt down.
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 that 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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Student Credit Cards in the News
From the New York Times – 5 credit card tips for students – Have you ever found yourself daydreaming in class and looking around the room and looking at advertisements and applications for credit cards on the bulletin boards. No? I sure did.
With spring break around the corner and little money to pay for the trip, a credit card may seem enticing for many students. One Millenial’s take on leading a credit card-free life CreditCards.com blog Author of Credit Card Nation offers warnings.
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Credit card rates dip for rewards and student credit cards. For over three years now the the prime rate has stayed the same, but credit card rates have been seeing livelier days recently. This of course does not work in favor of customers. So what’s up? Read on and find out.
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It is difficult to say which type of payment card is best for a college student: prepaid, debit or credit. And yes, credit cards are very much still an option that is available to college students, even as the CARD Act placed some restrictions on the marketing and underwriting of credit cards to people under the age of 21. There are certain rules to consider, but at the end it would be a case-by-case decision. And this is a testament to how much prepaid cards have improved.
One reason I like prepaid cards for students is that, for the most part, young students are still irresponsible when it comes to money. I know I was. When I went to university, I spent money as though it actually grew on trees and was there, Free for the taking. But if my parents gave me a prepaid credit card and told me what the rules were for spending that money, I would think twice about using it to buy a case of beer…just saying…because if the card ran out of money and my parents found out that I spent it all on junk and not necessities, I wouldn’t be going to university anymore. I’d be pumping gas.