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Student Credit Cards: Should You Apply For One?

College students are one step closer to gaining independence and now begin to assume complete responsibility for them selves. While college is perceived to be the last four years of financial freedom,  it is also, more importantly, the perfect time to train young adults on money management, which they will need later on in life, when they begin to invest and to support their families. This is one of the reasons student credit cards are gaining popularity these days. UPDATE: Before a person gets or apply for a credit card, it is import to first leanr about managing credit. Read The FRB site - Managing Your Credit Page

What are the types of student credit cards in the market today?
There are several kinds of student credit cards, each with their own features, perks and of course, fees.

UPDATE: Here are the top 4 student credit cards.

The first type is the student credit card, which is best for students who have been trained to handle money responsibly. Issuers of these cards understand that students have not established their credit ratings yet. One challenge is a high interest rate, though.

There are student credit cards with 0% interest rate, for young adults who are capable of conveniently paying their existing debts every month. However, there is usually a catch with these cards. The 0% goes up to 14-16% after 6 months.To avoid this inconvenience, debts should be paid in full before it is due.

The third kind is student cards with rewards, for those who make most of their purchases using their card. It’s great because students can really get a kick out of cash back, gas rebates, movie discounts and freebies, and airlines and hotels rewards.

For students who have had history of poor credit ratings, there’s the secured credit card, which helps them re-establish a good credit standing, and teaches them how to manage their finances. However, to be approved, one must deposit at least $200 with your application. There is also usually a higher interest rate and annual fee for these cards.

What perks can student credit cards offer?

Student credit cards are not just shiny plastic pieces which students use to magically pay for their purchases – they offer convenience, wherever you are in the world. Students can have a hard time keeping track of cash or their checkbook, so it is generally easier having one card to pay for everything.

Also, since most students are first-timers with credit cards, student credit cards are a great way to build credit score, which they will need later on in life, when they purchase a house, or apply for a loan.

Because credit cards send holders a bill every month, it can be easy for students to track their expenditure, and make adjustments on their budget. Maxing out the card or not being able to pay monthly debts could leave them in a sticky situation so many students study their spending habits through their account statements.

Student credit cards usually offer great rewards such as movie discounts, shopping rebates, which avid shoppers and movie goers can really appreciate. Gas rebates and air miles are best for students who travel a lot, or live away from home.

What are possible challenges that student credit cards pose?

Many card companies do not issue credit cards to students because of an absence, or insufficient credit history. Also, there has been an age-long debate about whether of not college students should be issued credit cards. Many regard their youth as synonymous to impulsive and irresponsible, putting them at risk for a mismanaged debt very early in life, or a credit standing which will cripple their finances and chances of securing loans in the future.