http://www.student--creditcards.com Helping students pick a credit card Tue, 01 Jun 2010 02:46:54 +0000 http://wordpress.org/?v=2.8.4 en hourly 1 http://www.student--creditcards.com/2010/04/student-debit-card-vs-student-credit-card/ http://www.student--creditcards.com/2010/04/student-debit-card-vs-student-credit-card/#comments Thu, 22 Apr 2010 10:08:32 +0000 admin http://www.student--creditcards.com/2010/04/student-debit-card-vs-student-credit-card/
So little Johnny or Janie is about to go off to college – yes? And you’re worried about how they’ll manage their money (that is to say, your money) and you want to get them some plastic to give them some financial freedom and control and to give yourself some security. So what should you choose then – a student debit card or a student credit card?

Let’s start off by understanding the difference between your basic debit card and credit card.

When we say a student debit card, we mean a prepaid debit cards designed just for students. This is a card that you “load up” with money before hand. You choose the amount and you add it to your card – that simple. Then, you use the card to buy whatever you want because the card is actually a Visa or MasterCard product and so it can be used all over the world just like any other Visa or MasterCard.

You use it to purchase magazines, clothes, airline tickets, groceries, etc. Then, when you’ve spent all the money you loaded onto it, you either forget about it or you load it up with more money and continue as before. The key point to remember here is that you spend only the money you’ve already loaded.

Now a student credit card on the other hand may look identical to the student debit card but here the key point is turned around. With the credit card you spend credit (think of it as money that you haven’t loaded yet). And you simply “load it” later.

So what’s the best choice?

Well, speaking as a parent of a near college age child (and someone who’s weathering the current financial storms) the choice is an easy one. I choose the college student debit card – hands down. Here’s why.

I’ve learned the hard way over my life that it’s best to save for things and then spend the money instead of spending it now and paying for it later. That’s because when you pay for it later you also pay interest charges unless you’re in that tiny, tiny fraction of consumers that actually controls their spending with an iron fist.

Most young people aren’t disciplined enough to control their spending impulses with a credit card. Their emotions will get the better of them and they’ll splurge on something or another and soon end up making minimum payments and pay gobs and gobs of interest charges which effectively make everything you bought with the credit card in the first place much more expensive. And you end up having less financial freedom, not more because you’re tied to the payments and you have less credit to use.

So when it comes to a college-age kid, I think it’s best to have a little discipline built into the card and that’s just what a student prepaid debit card does. It forces youngsters to pay attention to the cost of things and how much money is left in their balance because if they don’t, they’ll find out what it’s like to have their card declined and that’s an unforgettable and unsavory lesson in finance.

Oh, and the other great thing about student debit cards is that you (the parent) can purchase them in the first place and thus be able to keep track of every purchase your child makes even if they go to college in another country. You’ll also be able to load the cards up rather quickly in case of an emergency (from wherever you live) which is something you can never do with a credit card that’s reached its limit.

So in the end, it’s really no contest. Pick the credit card with the most inherent risk and ultimately the least amount of flexibility? Or do you pick the student debit card that has the least amount of risk and the most flexibility? It seems simple to me.
]]> http://www.student--creditcards.com/2010/04/student-debit-card-vs-student-credit-card/feed/ 0 http://www.student--creditcards.com/2009/07/student-credit-card-a-financial-freedom/ http://www.student--creditcards.com/2009/07/student-credit-card-a-financial-freedom/#comments Wed, 22 Jul 2009 00:02:46 +0000 admin http://www.student--creditcards.com/2009/07/student-credit-card-a-financial-freedom/
Most of the students will attest to the fact that student life is/was a stint in penury. It is when finances are tight and every penny matters. Credit cards which can cater to the indigence of students are becoming very popular these days. Many credit card companies cater credit cards to students, whose financial needs are unique and specific when compared to the general population.

Though the processes of obtaining a credit card for students are much less complicated, a prudent student should strive to obtain maximum information on these. It is an educational process which prepares a youngster for the workings and responsibility of using and owning a credit card in their adult life. Most credit card companies stress that a student should think of applying for a credit card only when he thinks himself ready for it financially and personally.

There are many articles online and offline available as resources for students to tap into when the need more information about selecting a credit card. It is a time-consuming process, where the student needs to compare multiple credit card offers, companies and their own spending habits, eventually settling on the correct one. Once they decide on a credit card, students should be careful in applying for it as important information is exchanged and it should be done securely.

Some of the student credit cards come with extra perks, like student loans and reward offers. Since a student credit card forms the beginning of one’s credit score, it is imperative that the student appreciates the importance of building up a good credit history. A damaged student credit card score can forever impact their lives or at least for a long period of time. But if the damage has been done, it is also never to late to repair one’s credit score and preventing more damage.

Student credit cards usually have low interest rates which is beneficial to the student. A good student credit card will be the ones that meet each person’s individual needs in the best way. Many students use their credit cards in conjunction with their student loans to pay for their college expenses.

A student who is seriously considering a credit card should being by having a well-planned budget, which should be faithfully adhered to. It should be realistic and rational with some financial breathing-space added in. This adherence to effective planning and a reasonable budget will assist a student in paying their credit card bills each month. It will also simultaneously help in improving their credit score. Students who opt for a credit and then unfortunately find it difficult to maintain it can make use of credit counseling that most of the credit card companies provide. An important tip for student card holders is to pay off the entire balance each month whenever possible.
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