Have You Considered Applying For A College Credit Card?

As its name would suggest a college credit card is a credit card that has been specifically designed for college students and is perhaps better known as a student credit card. Student credit cards are meant to let students learn all about handling credit and to experience the benefits of credit cards early in their lives. Effectively, a student credit card is an introduction to the world of credit cards and, even though a student may have experienced using a supplemental card on a parent's account, it represents the first credit card that the student will have in his own right.

Effectively college credit cards operate in precisely the same way as ordinary credit cards but there are some differences which you have to know about. These differences occur because the credit card issuers are taking something of a risk by giving credit to people who will generally have no credit history and thus they have to protect themselves against the higher chance of debt on college credit cards.

The first significant difference is that credit card issuers require a parent or guardian to co-sign the student's application for a card, so that the parent or guardian knows that the student is asking for a line of credit, and will also require that parent or guardian to stand as a guarantor on the account. Therefore, if the student defaults on the card then the parent or guardian will be legally liable to make good on any debt.

The second significant 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 the credit card companies consider this to be high enough to meet the needs of most college students.

Finally, card issuers also offset their risk by setting the interest rates on student credit cards a little higher than normal in an attempt to stop students from overspending on their cards and to persuade them to maintain their spending within the sum that they can afford to pay off each month.

On the surface college credit cards may not seem terribly attractive to people who are accustomed to handling standard credit cards but in fact they can be a very handy tool for teaching youngsters to manage credit responsibly and have the added benefit of providing students with the ability to start to build up a good credit record, which will be very helpful once they leave college.

College can be a very expensive time for many students and there are only a few students who will make it through a college education without a mix of parental support, scholarships and grants, federal loans, private loans and a part-time job. This can be difficult to manage and far too many students have problems dealing with this and finish up being forced to refinance their loans, generally through student loan consolidation. If we add a college credit card into the equation we could merely be providing the straw that breaks the camel's back for some students.

Whether or not student credit cards are a truly good idea or simply another marketing ploy by the credit card companies is something which you will need to judge for yourself however, whatever your view, they are without any doubt something which you need to approach with both eyes open if you are to avoid having to seek credit card debt help and repair your credit report history at some point in the future.