Many students often have little or no credit score upon exiting college and it’s for this reason that things can be difficult later in life when it comes to the getting a job or buying a home. Obviously, a credit score affects a mortgage rate a homebuyer receives or even one’s ability to buy a home and there are many employers who look at a credit history when considering a candidate for a position at a place of employment.
Student credit cards can be beneficial for building a credit history and can help a student start to increase their credit score. New credit card laws make it more difficult for companies to take advantage of students so student cards can now be a safer way in which a college student can establish a credit history.
Some cards may require a cosigner, which can be beneficial in keeping a student out of credit card debt, but many student credit cards or even secured credit cards can be helpful when it comes to building a student’s credit score. A secured credit card or a student credit card will need to be used with a great deal of responsibility as even a very affordable credit card can be quite costly if the student lets the charges they make it past their ability to pay.
Any parent or student who may be considering getting a secured credit card or a student credit card needs to do research before they make their decision. There are numerous credit card offers available so finding a lender that is reputable and who will not charge excessive fees and fines will be one of the first priorities when choosing a card. It will be important to remember, also, that no matter what card is chosen the student will be responsible for making smart charges and budgeting their income in a way that will allow them to pay these charges off from month-to-month.
A student credit card or secured credit card can be a valuable tool in building a credit history and establishing a credit score but it must be used wisely in order to be effective.