The Need for Convenient Student Credit Cards

Parents and students alike agree that in this modern world, students need a credit card while attending college. It is no longer something that only a lucky few students have; it has become virtually mandatory for college students. With new cards designed specifically for parents of college students, there are plenty of protections built in to these cards for both the parent and student and they offer a number of perks for using them instead of cash. While there are many great credit cards for students out there, looking at each card’s terms are important to make sure that the card is going to suit the needs of both the parent and student who needs a credit card when they go off to college.

Special Features

For most college bound students, any credit card will work to help them buy books, keep their dorm stocked with snacks and other normal college needs. However, most college students will be tempted to abuse a standard credit card’s generous limit and either they or their parents will end up with the responsibility of paying the card’s balance down. Because of this, student credit cards that are truly designed for responsible use by the student will have features that standard credit cards do not. In general, these cards are designed as joint account cards with the parents having account access.

In most cases, student credit cards will have pre set limits on how much the card can be used for in a given month. This allows the parents and student to set a budget and stick to it. Most cards actually have a limit higher than this set limit as well. This allows the parents to unlock the funds from the card in the event of something coming up where there is an actual need for more funds. This is especially handy when the parents are hundreds, if not thousands of miles away.

If the student’s computer breaks and needs repairs or they get sick, the parents can modify the card’s limit to allow the student to have access to the funds they will need to pay for things, all from the convenience of home. There are plenty of other ways to get money to a student but none are as inexpensive or as easy as simply logging into the student credit card’s account and changing the spending limit on the account. When searching for student credit cards, this is a feature no parent or student will want to be without.

Another special feature of many student credit cards is what kind of rewards the credit card has. These could be points redeemable for cash or prizes but many student credit cards actually can be setup to link back to their college accounts and help pay for school. There are a couple third party companies that credit card issuers can work with that actually take the percentage that would be converted to cash back, airline points or other rewards and puts them into a college savings account that then can be used to pay for school, books or anything else related to education during future semesters. Parents can let the students put tuition and books on the credit card for the first three years of school and have part of the final year paid for through this innovative system.

What to Watch Out for with Student Credit Cards

Not all student credit cards have the above mentioned features but others are simply student specific in name only. They lack any features that make them truly student friendly, budget friendly and some even border on being illegal with the current credit card laws that have been enacted over the past few years. Students have to show financial responsibility now to get credit cards on their own, otherwise parents or guardians must be involved in the process, yet cards are still issued to students who truly have no income.

Some cards will claim to be student credit cards but really are just plain credit cards with the “student” name attached to appeal to parents and students alike who are looking but not looking deeply into the details of the card. Having separate access for both student and parent to the same credit card account is an important part of a quality student credit card, but many fail to deliver on this.

Making sure that the credit card itself has a low annual fee, if any, is important as well. For the student, they could be budgeting around a specific amount of money to spend each month and be short thirty, forty, fifty dollars or more one month when the fee comes out. There are plenty of cards with low or no annual fee credit cards and parents should gravitate towards them. The credit card issuer will be making money on every transaction, not to mention interest from balances on the card from one month to the next, so making money off the card holders is not really fair.

Finding a card with a low interest rate is very important. For parents and students alike, having a high interest rate may not seem like a big issue when the card is obtained but if an emergency comes up that requires using a large portion of the balance on the card, the chances of paying off the balance each month are not as good as when the card is used within the normal budget. The month after an emergency required using the credit card, interest will kick in on the balance. If the interest rate is high, paying off the balance is going to take quite a bit longer than if the interest rate is low. Thankfully, because the credit card is a co-owned card, both the parent’s and student’s credit ratings are taken into account when determining the interest rate for the credit card. While the student will likely have little or no credit when opening the account, getting student credit cards will help improve their credit score and get them ready for great credit when they graduate from college.