After making a statistical research, I have decided to share my ideas with you by guiding you on how to choose a student credit card that will give you the smartest and fastest experience.
With this guide, you will know the three types of credit cards, how to pick a credit card as a student, and the best ways to use your credit cards, etc.
Firstly, it is important to inform you that student credit cards may have a lower credit limit and may sometimes have a higher credit approval rate especially for the students with little to no credit history and limited incomes.
Note: for age requirement, you can only get a credit card at 18. If you want a credit card at 17, then you must be an “authorized user”. You can read more about it below.
Three major Types of Credit card
There are basically three types of credit card. All credit cards are classified into the three major types. The three types on credit cards are;
- Rewards credit cards
- Balance transfer/low interest
- Credit building cards
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1. Rewards credit cards
This credit card provides rewards to students on every purchases, which have some certain percentages given to student.
Cashback are also given to student on rewards which earns flat rate rewards. Flat rate card also earn fixed rewards rate regardless on what you buy which made it more easier for you to use.
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2. Balance transfer/low interest
Low interest rate is given to student who can pay their loans in full and it helps in reducing the amount of interest charged on your purchase, thereby saves you money.
Balance-transfer cards let you move high-interest debt onto a card with a lower interest rate.
3. Credit Building cards
The bureau is for student with poor credit sores, but student with poor credits score can still find a card that will help they improve their credit cards.
Examples are the Discover it® Secured Credit Card, Discover it® Student chrome; in which student can get 20% statement credit for every school year.
Things to Consider Before Getting a Credit card
So, for you to make a decision on how to pick a good credit card as a student, you need to look at some questions on why you really need a credit card.
Some of the questions to consider are;
Are you really ready for a credit card?
To know if you are ready for a credit card is very important and it’s also necessary, so that you can know how to manage your money and also pay back on time.
What are you signing for?
This is the second thing you need to know as a student, most student did not know why they want to sign up for a credit card, they just want to sign up because others are doing.
What is my card’s APR?
There are some charges that you pay without you knowing on your credit card. So firstly when obtaining a credit card you need to know the card agreement by reading the terms and conditions before applying for a credit card.
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The meaning of APR?
Most students applying for a credit cards does not know the meaning of APR and perhaps even the functions of APR.
APR simply means Annual Percentage Rate.
There are some many questions under APR, you need to know and each credit card has their own APR. So questions like;
- The difference between APR, APY and your interest rate?
- How to avoid paying unnecessary interest?
- What’s a good APR?
- What’s the interest rate when paying bills?
How to Choose a Credit Card as a Student in 4 Steps
The following are the 4 good tips to choose the best credit card as a student;
Tip 1: Choose the type;
It is very important for student to know the particular credit card to use, because some credits has so many interest rate, high APR, and some are not even specifically made for student.
Tip 2: Make a Decision;
Before picking a credit card, you need to make a decision as a student that you need a healthy Financial future. It is important to know that a good habits towards using credit card is very necessary for you as a student.
Tip 3: Keep to the Bank’s Terms;
The banks wants loyal customers that can pay back credits not those that can’t pay back, therefore they designs the credit cards for student to use.
Tip 4: Consider your age;
One thing you need to know as a student is that there an age limit on getting a credit card (i.e. you must be above 20years of age) but if you are independent as a student and you are not above 20 years of age, you can still get a credit or you parents or guardians can also get a credit card for you.
Note: The bank designs the credit card so that students can receive smaller credits limit. When bills are been paid early in full, a hood credit profile is been build, giving you the opportunity to have bigger loans like the mortgage or even a car loan etc.
You need to know that not all credit card issuers allows parents or guardians to co-sign for the students.
How to use your credit card wisely
There are wise ways on how to use you credit cards as a student to avoid being debt laden. These ways are;
- Read terms and conditions
- Read the fine print
- Don’t over spend, but if you do overspend, approach the bank
- Avoid purchases daily on your credit card
- Know your credit limits, always keep at least 40% credit limit
- Plan your expenses
- Pay your loan on time, never miss a card payment as this will increase the rate
- Choose the EMI option
All these are wise ways on how to use the credit cards.
How to close a Credit Card
Students might want to know how they can close their credit, if maybe it get missing or they don’t want to continue with the credit card, Schoolvanguard has gather some steps in which you can close your credit card. Which are;
- All outstanding loans must be clear, you might have to pay a penalty levy incase of any outstanding loan.
- You will need to fill a credit card closure form from the company
- The card will be cancer and a notification will be sent to you.
With this great information, I believe you have known how to choose a student credit card in 2022 with my 4 outstanding tips. I wish you good luck.