Applying for a student credit card while still in high school or college is one way to start building a credit history.
The difference of student credit cards from regular credit cards is that they are created especially for students who have not yet established a credit on their own.
This is why some credit card companies require a co-signer on behalf of the student applying for a credit card. This will be the only chance a person with no credit history can apply for an unsecured credit card without much hassle. Once graduated, a person without a credit history or with bad credit will have to apply for a secured credit card.
Student credit cards do offer low interest rates and rewards that are designed exclusively for students. For instance, some credit cards offer discounts from books, school supplies, diners, etc. Other student credit cards offer gas rewards program for those who travel back and forth from school.
The key to building an outstanding credit report is simply to submit payments on time and to avoid exceeding the allowed credit limit. If students can keep up with this practice, they will enjoy an excellent credit status that they will carry after they graduated from college.
What are the benefits of having prepared a good credit history after college graduation? An excellent rating will surely make the life of a newly graduate student a lot easier. This is the time he or she will need to look for an apartment to rent or to secure a car loan. Landlords and lenders do check on a person’s credit history before providing their service. A student who can present an impressive credit rating should have no problem getting an approval from the lender he or she chose or getting an apartment that he/she wants.
Looking for a job will also be a lot less complicated. It is no secret that employers also check an applicant’s background through his credit report. Today, it’s not enough to show good grades and awards. Most employers prefer to hire people who have already proven their sense of responsibility and credibility through their credit report. Thus, you can imagine how difficult it would be to find a decent paying job if you don’t have good credit history to back you up.
Clearly, student credit cards offer a wonderful opportunity for students to start establishing a credit report early in preparation for their future. Of course, it is important for students to realize that establishing a credit history is only as good as what is contained in it. To be efficient, students must strive to keep their credit report free from derogatory marks at all times. This isn’t as difficult as it may seem to be. All it takes is the responsible use of credit cards and the awareness of the student to submit his due payments punctually at all times. This will not only ensure a good credit standing, it will also help a student learn and experience effective financial management.