For a student it is difficult to get a traditional credit card since he does not have any credit history or low credit score. Student’s basic needs are books, stationeries and fees which are normally financed by the parents at the start of the academic session but these needs can come up any time and student will require cash to buy these items. Similarly, students often find it difficult to do online purchasing in absence of a creditcard or finance a dinner or friend’s get together since funds available to him are limited. Credit card in such a case helps the student with additional purchasing power. Student credit card also helps the student start building a credit history.
There are several credit cards designed specifically for student’s needs and requirements. These credit cards are issued only to students on satisfying certain financial requirements and mostly they are co-branded to provide better rewards on purchases. Sometimes the cards are also marketed by the colleges and are available at attractive rates to the college students. Student credit cards generally have low credit limit and mostly guaranteed by parents. The interest rates in most of the cases are similar to traditional creditcard . However, the reward system is designed to give maximum benefit to students by partnering with book shops or stationery merchants or colleges or with dinner clubs.
Students card are similar to traditional credit cards in all other aspects. The following are the main category of student credit card:
The application process for the student credit card is similar to any traditional credit card application with only difference being that you need to be an eligible student to apply for this kind of card. You need to submit a document proof to prove that you are a student like college ID card or institute membership card etc. The card provider also asks for your financial data and a guarantor which can be your legal guardian or your parents. Once satisfied about the repayment thecard provider processes the card. Most of the cards are unsecured in nature with low credit limit, however, banks do offer secured credit card which are backed by either a fixed deposit or a savings accounts. Before applying for any student card you need to do your own research as to which card suits you depending on your needs and expenses and finalize the best fit.