College Students and Credit Cards
College Student Credit Card offers you the opportunity to enjoy the benefits of having credit, while also teaching the value and responsibilities that go along with those freedoms. It is designed for a college students and usually works the same way as any credit card that has been issued by a financial institution. Some require a parent or guardian to co-sign. It means the student's parents must agree to be the responsible party in case a student is unable to repay part or all of an outstanding credit card balance. Higher Interest rates are typically higher for student credit cards since students do not have a proven track record of promptly repaying loan balances at the credit bureau. Higher interest rates allow the banks to spread the cost of greater losses over the entire student credit card population. Lower Credit Limit, lower credit limits (typically $500 - $1,000) enable students to start building credit history while limiting the risk of loss to the bank that issued the card, because it s the first time a student has been responsible for credit, so Therefore, the student does not have any credit history or rating for the bank to draw upon to make their credit decision. In addition to student loans, college students may have high credit card debt. Eager to woo college students, credit card companies market their cards on campus with incentives such as t-shirts and sunglasses. The result – students can get credit without understanding the responsibility of handling credit.It is important for students to establish a credit history. At the same time, using credit without knowing how can turn into a crisis. Almost 65 percent of college students have at least one credit card; 15 percent have four or more. Twenty-five percent have at least $10,000 in credit card debt.
CREDIT CARDS FOR STUDENTS
Debit and ATM Cards
Don’t confuse debit cards with credit cards. Debit cards may look like credit cards, but they act like checks. Once the debit card is used, the amount is immediately deducted from your checking or savings account. The debit card eliminates the need for carrying cash, but it does not extend credit. Debit cards may be used as guaranteed check cashing cards. In contrast, credit cards defer your payment until you are billed.
Some cards can be used to withdraw money from automatic teller machines (ATM). Beware of fees eating up your money if you use your ATM card frequently for small withdrawals. Some financial institutions charge their customers a set fee for a certain number of transactions. Other institutions charge for each ATM use. If you get cash at an ATM machine that is not part of your financial institution’s network, the fees could be as much as $8 per transaction.
Parents might want to introduce their children (ages 13 to 17) to prepaid debit cards such as Pocket Card, American Express Cobaltcard, and Visa Buxx, by funding a card that has a spending limit established by parents. Parents supply the funds and can use the cards to teach their children how to track how the money is spent. This parent-controlled card is designed to help parents teach their teens about using credit in a controlled environment. One example of a prepaid credit card can be found at VisaBuxx.com.
Some cards can be used to withdraw money from automatic teller machines (ATM). Beware of fees eating up your money if you use your ATM card frequently for small withdrawals. Some financial institutions charge their customers a set fee for a certain number of transactions. Other institutions charge for each ATM use. If you get cash at an ATM machine that is not part of your financial institution’s network, the fees could be as much as $8 per transaction.
Parents might want to introduce their children (ages 13 to 17) to prepaid debit cards such as Pocket Card, American Express Cobaltcard, and Visa Buxx, by funding a card that has a spending limit established by parents. Parents supply the funds and can use the cards to teach their children how to track how the money is spent. This parent-controlled card is designed to help parents teach their teens about using credit in a controlled environment. One example of a prepaid credit card can be found at VisaBuxx.com.
No comments:
Post a Comment