Just as the word implies, student credit cards are credit cards
meant solely for students, many that have not earned a documented
income with employment. Credit card issuers are aware of students
and their credit challenges so they make accommodations for
students when building student credit card offers specifically.
Typically, the only restriction when applying for a student credit
card is the age of the student, and as mandated by the law of the
country, which is typically 18 years old and above at the time of
application. In many ways, a student credit card is almost the same
as traditional, run-of-the-mill credit cards. But the major
difference, is the standard APR, or interest rate, levied for card
purchases, which is relatively higher than a traditional credit
card APR.

Student credit cards provide more financial flexibility for young
students. But, while it may come in handy when paying the rent,
paying tuition, purchasing books, and other necessary items like
food and clothing, unbridled card swiping can sometimes lead to
financial trouble, especially in the form of poor credit scores and
damaged credit histories. To a certain extent, this can be blamed
on a lack of education or awareness as young people, often times,
will not think too much about the concept of credit scoring or the
idea of building a good credit history. As a result of this lack of
awareness, they will typically not restrain themselves from using
the credit card freely either.

The danger of poor credit scores will not become readily obvious,
but will certainly become apparent when the student approaches a
bank for credit at a later point in time. Credit profiling or
credit scores, as determined by any of the three credit bureaus,
represent an individual’s credit life history, and black marks on
credit histories, however they are acquired, will make it tough, at
worst, more expensive, at best, to secure the lowest possible
interest rate on the loan or financing. So, consequently, even if
one manages to get the home loan or car loan, for instance, the
interest rate, in order to allow the bigger credit risk anticipated
by the bank, will be higher than normal, and in turn, much more
expensive for the borrower. The bottom line is that student credit
cards represent a potential risk to future economic standing if the
cards are not used judiciously.

As previously mentioned, it is clear that uncontrolled use of a
student credit card can easily damage an individuals budding credit
score and credit history profile. But on the flip side, intelligent
spending and timely payback can go a long way toward building a
solid credit history and credit score. Using the card for necessary
purchases that are well within his/her payback capabilities and
making the payments well within the due date can improve one’s
credit rating tremendously.

The rules of credit bureaus are pretty straightforward. The amount
of money that an individual borrows will be mirrored in his or her
credit report and the credit limits that each person can save will
be reflected in the amount of credit that the individual has
previously “borrowed” and has paid back on time. Simple, right?

One additional point of interest…the credit card company is
supposed to report each transaction that is been done on a specific
credit card account to the three major credit bureaus quickly. But
this does not happen in every case. More indicatively, secure
student credit cards or prepaid cards, often times will not report
transactions to the major credit bureaus. Therefore, it is the
user’s responsibility to make sure that the credit card transaction
history is indeed being reported to the credit bureaus and is being
done done in a timely manner. Remember, an unnoticed credit
transaction does not do any good to improve your credit history.

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