Student credit cards are exclusively facilitated for students. It teaches them to use the proper method of spending money and helps them habituate to the art of saving. It is accepted across different places and is similar to a regular credit card that your parents often use.
Furthermore, because they are designed with little or no credit history, student credit cards are easier to get approved for. A student credit card is distinguished from a regular one, through several features, including lower credit limits, higher interest rates, and a lower age limit.
If you wish to handle your college expenses and gain independence, apply for a credit card with student-friendly facilities.
What Is a Student Credit Card?
Student Credit Cards are handed over to applicants who are of 18 years of age. It is similar to the other credit cards and has a lower limit. It is a huge convenience for the students. It comes in great need during emergencies and helps students build a better credit history. However, financial institutions refrain from giving it to those with bad credit. The student should have an income (self-employed) part-time or full-time or can be co-signed by a parent.
The low limit criteria of credit cards for students help them to borrow and repay it on time. It helps keep a tab on monthly income and expenses and the amount of debt and keeps a record of the monthly expenditures.
You are more likely to be eligible for a student credit card as a college student than for other types of credit, such as personal loans or auto loans.
Advantages of Student Credit Cards
- Helps you pay in EMIs: Putting a large purchase on your credit card to defer payment is an option if you don’t want to sink your savings into it. Additionally, you can pay off your purchase in equated monthly instalments, ensuring you aren’t paying a lump sum and denting your bank account. EMI is less expensive than taking out a personal loan when purchasing a mobile phone or smartwatch.
- Keeps a check on your expenses: Your monthly credit card statement includes a detailed listing of all purchases made with your credit card. Tracking your spending and purchases can be helpful when creating a budget or filing taxes. In addition, lenders provide instant alerts each time you swipe your card, letting you know how much credit is left and how much is outstanding.
- It ensures flexible credit: There is an interest-free period on credit cards, which means you will not be charged interest on your outstanding balance. By paying off the entire balance by your credit card bill payment date, you can get free, short-term credit for 45-60 days. A credit advance allows you to take advantage of a credit card advance without paying the charges associated with an outstanding balance.
- Builds your credit: Your student credit acts as a measure for the credit bureaus to forge you for your credit capability. Your credit score acts as a hallmark for determining the financial responsibility you will be able to undertake. You can maintain a good credit score only if you borrow and repay the money on time. However, be careful not to delay the payment. This will result in dropping in your credit score. A good credit score should be around 700. Your life investments, including a home loan for a house and a car, can be quickly done with a solid credit score.
- Student credit cards offer additional benefits like cashback or subscriptions to your favourite OTT platforms.
- Several unexpected expenses: You might come across unexpected expenses in your study period as a student. When the budget is tight, you might have to pay a sizable utility bill, shell out a few hundred rupees for textbooks you forgot to buy, or experience a medical emergency, unexpected car or house repair while travelling abroad. Your student credit card can come in handy in an emergency if you try to pay your balance in full each month.
- Credit cards for students teach them to use their finances responsibly. You can learn how to pay the money on time and in regular cycles without missing deadlines. Budgeting is necessary when it comes to living alone; in such cases, student credit cards come in handy.
If you don’t have a credit history, you can apply for a credit card for students. These cards are less expensive than conventional ones and ideal for students who want to start building their credit history while winning rewards. Choosing the right credit card is necessary as it should fit into your financial expenditures effectively.
If you use your student credit card properly, you may get offers from the card issuer from time to time. It’s the best option for those looking for a quick and dependable way to pay recurring payments and daily expenses while also building credit. Wise usage helps students control their expenses and savings.