Managing your finances yourself gives you a sense of confidence as well as guides you towards becoming a responsible adult. The earlier you start the process, the sooner and better the outcome. And how early can you start? Well you can start right from college. If you are thinking how you can possibly manage finances when you don’t make enough to pay for your purchases, you can put your worries to rest by opting for a student credit card.
As the name suggests, a student credit card is indeed a credit card for students who are at the college and university level. How are they different from regular credit cards? Well, these are special cards that are designed for individuals (students), who, for the lack of credit history, cannot apply for a standard credit card. The credit limit and interest charged are designed to meet the limited expenses a student can incur. As a result, the credit card for students offers the access to money at a time when you need it most, helping you to build your credit score while ensuring you get to repay the money at a time convenient for you.
What is the Eligibility Criteria for Getting a Credit Card for Students?
Before you begin the student credit card application process, you need to make sure that you are eligible to apply for a student credit card online or offline.
Here are the some things you should keep in mind-
- You need to be more than 18 years old.
- You need to be enrolled in a college or university.
- You might need your parent or guardian to get a fixed deposit account against your student card, on the request of the credit card issuer.
- For getting the student credit card, you might require to have a savings account, with the bank, that has a minimum quarterly balance.
- You can apply for a student credit card with the bank if you have applied for an education loan from it already.
What are the Advantages and Disadvantages of Getting Credit Card for Students?
Getting a student credit card can be quite useful. To understand this, let us take a look at the advantages of the card-
- The cost of availing such a card is usually lower compared to standard credit cards.
- The access to funds lets you manage your regular expenses with ease.
- You are not required to pay upfront and can conveniently repay for your expenses at the end of the billing cycle.
- By using the card within the credit limit and paying your bills on time, you can build your credit history while also improving your credit score.
- Several student credit cards offer rewards on purchases using the card, such as cashback and discounts.
- As the credit limit on such cards is low, it prevents you from borrowing more than you can manage to payback
You should also know about the things you should be careful about when getting a credit card for students.
Here are some of the disadvantages-
- If you fail to pay the minimum due amount each month, you can risk lowering your credit score.
- The interest rate charged on student’s credit cards is usually high, as a result, defaulted and missed payments can turn out to be quite the expensive affair.
- Fees on cash withdrawals using the credit card as well as fees on foreign transaction sare relatively high too.
- The credit limit on such cars is relatively low, which might not be enough to cater to all your monthly and annual expenses.
What Rewards to Expect from Student Credit Cards?
Student credit cards are designed to make it easy for college students to manage their finances on their own. To add a bit of fun to the process, some credit card issuers also offer rewards and deals on purchases. This can be in the form of a cashback or a discount, which can be a boon as it can help you save more. Typically, such discounts can be availed on movie tickets, event tickets, waivers on fuel surcharge, free lounge access at airports, etc. You can also earn reward points on your card purchases and use the same to purchase items off your wishlist at partner stores. Download the Finserv MARKETS App to know more.
College is the first step to becoming an adult. Along with a ton of excitement, it also brings its fair share of worries. Amidst the looming concerns of the future and significant life decisions, having a steady control over your finances can offer you the much-needed solace now while also building a secure foundation for tomorrow.