College students often have the trouble of having little or no credit history, but most cards that are offered to college students have a high interest rate. Also, due to new legislation, some college students may not even be able to get a credit card without their parent’s help. However, secured credit cards may offer the means to build a college student’s credit history without a high interest rate.
Secured credit cards work like unsecured credit cards only they are backed by an account that has the funds that cover the spending limit on the card and insures the bank against any loss they may sustain if the cardholder defaults.
Yet, a secured credit card isn’t paid by those funds in the account, but the cardholder is responsible for making payments on their charges from month to month. Ideally, if you are looking to build a credit history, saving money and then making a purchase is going to afford you the least amount of trouble, as you have the money on-hand when the card bill is due.
College students that want a better credit score may want to look for reputable lenders that offer a good secured credit card that also comes with minimal fees. When used correctly, a secured credit card will provide college students with the means to begin building a good credit history and increase their credit score.