Credit cards these days have become essential for college students as it helps them carry out various kinds of transactions. Many parents want to give their college going children a credit card, so that they can deal with any kind of financial emergency. There have been a lot of criticism about credit cards but student should make use of them as it helps to learn about credit rating and proper planning of finances. It is important to assess, whether an individual has the capacity to pay the monthly credit card bills on time, before applying for these cards. A lot of responsibility initially lies with the parent, as they need to keep a constant check on whether the credit cards are used properly by their children. There are a lot of benefits related to the usage of credit cards for college students. Credit card companies do not want any proof of income before approving student credit cards. This aspect makes it easier for almost every student to get their hands on credit cards. There are various types of credit cards that can be availed by students smoothly.

Secured Credit Cards

Secured credit cards require a person to present the card companies with a certain amount of collateral, which ultimately becomes the credit limit for the card. For example, if somebody has given a collateral worth on hundred dollars then the credit limit of the card automatically becomes one hundred dollars. In order to increase the credit limit, one need to deposit more collateral and sometimes the companies enhances the limit, if a consumer displays a regular payment record.

Unsecured Credit Cards

The credit limit for unsecured credit cards for the students is around the range of three hundred to five hundred dollars. Students applying for these cards do not need to have the kind of credit rating. A co-signor is not required if students applying for these cards, are above the age of eighteen years. People, who have a good knack of handling their finances, can successfully handle the responsibility of having a student credit card.

Prepaid Credit Cards

Prepaid credit cards are quite similar to a bank checking account. A customer can use these cards only when there are funds in the account. The service fees for such type of credit cards are quite less. It also makes people refrain from using these cards for unnecessary needs. Here is a list of benefits that are an integral part of credit card for students.

Comprehend Credit Rating

A credit rating is basically a rating system which provides people with scores based on their how regularly they make their loan payments. Credit scores of an individual are available with most of the financial institutions, and the credit rating tends to improve when one continues to make regular payments for their debt. Elements such late fines, and default are some of the factors that can down your credit scores. Credit scores are dependent mostly on a person’s history of payments, the tenure of his debt related transactions, and the total amount of unpaid loans.

An Emergency Option

College student credit cards can be used effectively during the occurrence of a financial emergency and hence this factor motivates many people to apply for these cards. Getting funds in times of need can be especially difficult for students and with credit cards such situations can be handled with ease.


Many student credit card providers offer attractive schemes through which various rewards can be earned by the user. Most of times, companies tend to offer rewards to customers who pay their dues on time. It is important to check all the terms and conditions of any student credit cards to understand the exact details of schemes and their fees. Many times, students end up with credit cards which has high interest rate because they were not aware of the actual fees and interest rates while receiving their credit cards. To avoid paying high interest rates, one should carefully study the terms of the credit card company to understand whether it would suit his needs or not. It is advisable to use student credit cards wisely in order to create a good credit history, so that it because a lot easier to procure loans in the future.

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