If you are in school, you have probably received a number of student credit card application forms in the mail. These mailings are typically sent en masse to college students around the world, offering them the opportunity to get their first credit cards.
When used wisely, these cards can be a great way for students to build a solid credit history before leaving school and entering the workforce, and may enable them to make emergency purchases as cash strapped students when necessary. Before you fill out the application, there are a few things that you should know.
The difficulty in qualifying for credit when you are a student often stems from the fact that these young adults have little credit history to speak of. Typically, most students have never before had a card or a bill in their name, so their credit history is non-existent. These special applications and terms take this into account, and generally have different requirements than more traditional types of credit.
As there is slightly more risk involved in lending to those whose credit is unknown, the terms that you are offered may not be entirely favorable. In some cases, interest rates will be higher than average on student cards. In others, it may be necessary to provide the contact information of your parents as cosignatories. This means that if you do not pay your balance, they will be responsible for doing so.
Students should be prepared to fill out information on the student credit card application in answer to questions about their current level of income, their parent’s income bracket and other items which may be deemed relevant. It is typically required that applicants furnish their social security numbers on these forms, so students should be aware of that before moving forward. It may also be necessary to provide information not just on your current residence, but where you have lived over the past five or ten years. Though it may seem odd, it is a common part of this paperwork and nothing that should raise any red flags.
For many, this will be their first credit card, so it is important to use it wisely. Those who make all their payments on time and maintain a low balance will find that they leave college with no card debt and a spotless credit history. However, students who overspend and are unable to keep up with their bills may find that they have difficulty getting loans or additional cards after graduation.
When college students use them wisely, a student credit card application can help them get off on the right financial foot early. With this initial line of credit, you can begin to build a solid financial future.
