Student Credit Cards – What are they and How to Apply?
Students, today, understand the importance of credit. They know that the sooner they start building their credit, the better it will serve them when they take out big loans in the future. Student credit cards are the best tool to build credit for students, as they’re designed specifically for this purpose. This article will give you a lowdown on everything about student credit cards.
What are Student Credit Cards?
Student credit cards are designed to help students start building credit. They function just like regular credit cards, except they tend to offer lower credit limits and little to no incentives. This proves beneficial for students, who are able to build credit without paying high interest. The basic requirements for a student credit card are pretty straightforward as well.
Features of a Student Credit Card
Student credit cards are innovative tools, with tons of great features. Here are a few that we liked more than others:
The process for getting a student credit card involves minimum paperwork. Students have to produce next to know documents, and their applications are processed in minimum time.
Possibility to earn points
Besides helping students build credit, student credit cards also offer attractive points, which can be used to avail discounts and coupons at online and offline merchants. There are rewards for prepayment, timely payments, and good grades as well.
No joining fees
In order to avail of normal credit cards, you need to pay a certain fee. The amount depends on the type and class of the card. Student credit cards, however, do not involve joining fees. There’s usually no annual fee either.
Emergencies can come up anytime. Student credit cards shield students from such a situation by allowing them to withdraw a certain amount of cash on their credit cards. While the limit is low, typically 10% of the credit limit, it helps students when they’ve run out of cash.
Convertible to normal credit card
When a student finishes his education, he or she can convert their student credit card into a normal credit card. The credit and withdrawal limit is increased accordingly, although so are the applicable interest rates and annual fees. This feature is particularly helpful, as it enables students to have a long credit history and relation with a lender. Longer credit histories, meanwhile, also contribute to better credit scores.
How to apply for a Student Credit Card?
You can apply for a student credit card if you’re 18 years and over. While some credit card issuers also demand that you have an education loan with them, most of them will process your student credit card application if you’re over 18. The process is pretty straightforward, requiring minimum documents. Additionally, here are a few other ways to apply for a student credit card:
- You can apply for a student credit card against a fixed deposit in your name. The credit limit on the card will be equal or close to the value of your fixed deposit.
- You can also apply for a student credit card against your savings bank account.