What Should Students Know About Getting a First Credit Card?

College offers a sense of freedom while also garnering responsibility in an individual. You are required to make decisions and plan your life, while also being accountable and prepared for the curveballs and new opportunities that come your way. In this process of maturing as an adult, it might be worthwhile to take responsibility for your financial freedom too. You can do so by opting for a credit card for students. Wondering what that is?

Well, a student credit card is a specially designed credit card for students. Students who are attending college or are enrolled in a university can avail the card. Primarily, it aims to offer an opportunity for students to take control and manage their expenses. There are several other benefits of getting a credit card for students.

What Makes Credit Cards for Students Worth It?

1.       Student Credit Cards are ideal for building a credit history.

2.       Making timely bill payments also helps improve your credit score, which can be useful while availing a loan or other forms of credit in the future.

3.       As against regular credit cards which have a validity of 3 years, the credit card for students has a validity of 5 years.

4.       Also, such cards usually have no joining fees, and the annual charges too are low, making it easier to maintain.

5.       The student credit card apply process also does not involve exhaustive documentation.

6.       These credit cards for students are designed to help you save more. They do so using loyalty and reward programs, which let you earn cashback and reward points every time you purchase with the card.

7.       Some credit card issuers also offer the benefit of upgrading the student credit card to function as a regular credit card, at any point of time while the card is valid.

What Factors Determine Eligibility for Student Credit Card Application

The eligibility criteria for student credit cards may vary depending on the guidelines of the card-issuing company. To know if you are eligible for the student credit card apply process, you should take a look at the below-mentioned factors-

·       The minimum age for application is 18 years old

·       You should be enrolled in an academic institution, which could be a college or university

·       Some credit-issuing authorities require a parent or guardian to invest in a fixed deposit account against the application of your student credit card

·       Some banks might offer student credit card against the availability of minimum quarterly balance in your savings account

·       Applying for a student credit card from a bank may be easy if you have already got an education loan from the same bank.

What to Look Out for When Choosing a Student Credit Card?

While choosing a Credit Card for students keep in mind, opt for cards that have-

·       Low cost of borrowing or low annual percentage rate

·       Low minimum repayment amount per month

·       Low annual fee with other charges being minimum or nil

·       Higher cashback on purchases

·       Better rewards and more loyalty points matched to your type of lifestyle

At a time when you are making plans for the future, setting up a strong financial foundation can prove to be quite useful. While offering the ease of managing your daily expenses at college on your own, it also establishes your creditworthiness so that you are better prepared for the challenges of tomorrow. Download the Finserv MARKETS App to know more.