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| Did You Know That You Can Have A College Credit Card |
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| Written by Donald Saunders |
| Sunday, 17 August 2008 20:35 |
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As its name would suggest a college credit card is a credit card which has been designed for college students and is possibly more commonly known as a student credit card. Student credit cards are meant to allow students to learn all about credit cards and to experience the benefits of credit cards early in their lives. Really, a college credit card is an introduction to the world of credit cards and, even though a student could have experienced using a supplemental card on a parent's credit card account, it is the first credit card which the student will have had in his own name. Effectively college credit cards operate in precisely the same way as other credit cards but with some differences which you have to know about. These differences arise because the credit card companies are taking something of a risk by extending credit to individuals who will normally have no credit history and thus they need to protect themselves against the increased risk of debt on college credit cards. The first important difference is that the credit card companies require that a parent or guardian co-signs the student's card application, so that the parent or guardian is aware that the student is applying for credit, and will also require the parent or guardian to stand as guarantor for the account. Thus, should the student default on the card the parent or guardian will be legally liable to make good on any debt. The second important difference with a college credit card is that the credit limit is usually set at a lower level than that seen on normal credit cards and is normally set at between $500 and $1,000. The limit is also set at a reasonably low level because this is considered to be enough to meet the needs of most college students. Finally, card issuers also cover their risk by fixing the interest rates on college credit cards a little higher than usual in an attempt to stop students from overspending on their cards and to persuade them to keep their spending within the amount which they can afford to pay off each month. At first sight college credit cards might not appear very attractive to those of us who are accustomed to handling normal credit cards but in reality they can be a very handy tool for teaching youngsters to handle credit responsibly and carry the added benefit of providing students with the ability to start to build up a good credit record, which they will find very useful once they have left college. College can be a very expensive time for most students and there are very few students who will make it through college without a mix of parental support, grants and scholarships, government loans, private loans and working part-time. This can be difficult to manage and far too many students have problems coping with this and finish up with no option but to refinance their loans, usually by using student loan consolidation. When we now add a student credit card into the equation we could merely be providing the straw that breaks the camel's back. Whether or not college credit cards are truly a good idea or just another marketing ploy by the credit card issuers is something which you will have to judge for yourself however, whatever your view, they are without question something you must be approached with your eyes wide open. About the Author: Visit TheDebtAssistanceCenter.com for a wide range of credit card debt help including such things as settling credit card debt Kindly provided by LJ-Marketing.dk You are welcome to use this article on your own website, if you include the link just before this text. |
| Last Updated on Wednesday, 27 August 2008 15:35 |
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