Preparing for Life With Credit Cards for College Students

One of the best ways to help prepare your young college student for the realities of life concerning finances is to educate them about the perils of personal finance, in particular the use of college student credit cards. Many companies offer them and they do come with a number of benefits. As recently as about 15 years ago, it was nearly impossible to get a credit card as a college student, but now the times have changed. Here are a few things to look for when you go to apply that will help you to get the best.

0% Interest

This feature allows your student to be able to make purchases and not owe any interest for an initial period up to 6 months. This time frame is pretty standard on credit cards for college students. After that time frame, the regular interest on the card comes into effect. Of course, every young person with a credit card also needs to know that by paying the monthly balance when it is due will bring most any card to 0% interest on a continual basis.

Balance Transfers

Most college credit card companies assume that this is the first card that students have ever owned and will not offer a balance transfer option. While there are a few card issuers that offer this card feature, a balance transfer is an undoubtedly rare feature in a college credit card. If they do allow it, then it still would only apply for the 6-month introductory offer period.

Higher Interest

The credit cards for college students do normally have a higher interest rate than your general cards about 16.99% up to 18.99% and beyond. So if the compound interest effect is demonstrated and emphasized to your student, it may help them to realize that they need to be fiscally responsible - or they will pay a steep price. Also, you need to know that it is more than likely that the introductory offer may be forfeited by just a single late payment.

Build Their Credit Rating

Many of the advertisements for college student credit cards emphasize that this is a good way for your student to build their credit. It is a good thing for them to understand too that how they treat this card will have a definite reflection on their credit ratings for the foreseeable future. So they may need some extra instruction on this, as well as knowing the importance of paying their bills on time. Many ads for these cards also point out that their card records may be accessed online and they can make payments electronically, yet another nice feature for internet-savvy students.

Rewards

Here is one of the ways that the card starts to make it worthwhile. For each dollar spent, rewards or points are given that can be redeemed either as cash, or as a gift. The rewards on these rebate credit cards include such things as air miles, concert tickets, gift cards, studio tours, and up to 5% cash back on certain items - usually groceries, gas, and medicine, and then 1% on others. Some college student credit cards even give special rewards for keeping a good GPA!

Another Option

If you think that traditional credit cards for college students might be a little beyond your student's readiness to be responsible, then there is another way to go when they go off to college. The prepaid debit card can also give them the ease of plastic without having to carry any cash around, or in their dorm rooms. Amounts can be easily transferred to the card, and some cards even permit amounts to be transferred from one family member's card to another family member's card.

Getting your student off to college is a big step in their life and yours. Getting the right college student credit cards can sure take a load off of your mind by knowing that they do not have to carry a lot of cash. They are also protected against any wrongful uses of the card, too. And best of all, your favorite student can learn to become fiscally responsible, with time, and get an even better card later on.