Secured Credit Cards For College Students–Can A Secured Line Of Credit Help Students Develop A Better Credit Score And Habits?

This summer many parents and students are preparing to either return to college or this may be the first venture into the world of academia for some, but many men and women often feel that providing some form of access to cash for their student will be vital so that, even when campus meal cards or an on-campus job may be available, students will have access to funds for other expenses as well, be they books or simply eating food off campus from time to time. Yet, with new restraints on credit cards that are available to individuals, particularly college students, some parents have opted to use secured credit cards for students, as this particular type of credit can help students not only when it comes to having access to the funds they need, but there are opportunities for students to develop a better set of financial habits and potentially begin establishing their credit score early.

Yet, some argue that these credit cards, which are usually available to bad credit borrowers, may not be the best option and students and their parents may want to explore student credit cards if they feel that this particular type of card will be helpful while in college. There are, obviously, debit cards associated with checking accounts that have always been an option for students and this can limit the amount of potential danger a student faces if they max out their credit or fail to pay back purchases made on either secured or student credit card.  Again though, if a student is in a position to begin making responsible purchases and payments on this form of debt, it could go a long way in helping them establish themselves in a positive credit position.

It should be noted though, the interest rates that are currently being reported on many secured credit cards average around 22% to 24%, but student credit cards may come at a much lower interest rate as there are some averages that have these cards ranging around 13% to 19%. It goes without saying, that the type of card, the credit position a student or their parents happen to be in, and any credit history that may be in place will all influence what rate a student gets, but more financial advisers are focusing on the use of a potential card as to the deciding factor of what type of line of credit should be pursued.

There are some students who have found themselves in a position where they can handle using their credit card, due to the fact that they may have an on-campus job or some form of income that will allow them to better manage their money, but if a student is solely relying on their parents to pay off their credit card charges, a credit card may not be the best route. However, when it comes to credit cards in general, if a student is simply looking for a way to have access to funds, a debit card linked with a student checking account can just as easily serve the purpose and, once again, there are no dangers of spending beyond one’s means to repay. No matter what a student and their parents happened to decide though, a credit card will usually require a cosigner, and this could put parents in the position where they will have to meet any payments that are not made on this type of card, but again, responsible students may be in a position to either begin the process of building their credit score with the use of a secured card or even a specific student credit card, as long as it’s properly used, from a reputable lender and will report to the major credit bureaus.