It is never too early to start building your credit score, as a student you should be thinking about your financial future. One for the most important aspects of your financial future is your credit history, and the only way to build a good credit history is to borrow money.
The first form of credit most people are extended is a credit card. As a student, you can benefit tremendously from a credit card, if used responsibly. Aside from the benefit a credit card provides to your credit history, a credit card is a much better option than carrying cash all the time.
As a student, you will want to find an offer that is specifically designed for students and the unique spending habits of students. Most likely if you are seeking your first credit card, you have no credit history. If you are a new borrower, with no credit history, most likely you will have a high-interest rate on your card.
Because of this high-interest rate, it is important that you find an offer with the lowest rate possible. When you do find the card, make sure you pay off the balance every month. It will be worse than not having any credit at all if you get a credit card and fail to make the payments on time.
Not every lender has credit card offers available for students and new borrowers, but many institutions still have offers specially designed for this market. You will want to find a lender who has experience working with students and has developed offers just for you. After finding a student credit card offer that has an acceptable interest rate and you qualify for, you should see what other benefits the card provides.
Many student credit cards have cash back rewards for purchases on things such as gas, and some even offer cash back rewards for all of your purchases, up to a certain amount. These rewards will typically be a few percentage points of your total purchase and you will have the option of applying this reward to your credit card balance. This is a great way to save some money on your purchase, while simultaneously building your credit.
If you have tried to get a traditional credit card as a student and did not qualify, the next best option for you may be a secured credit card. With a secured credit card, you give your lender a down payment and then you will be available to make purchases up to that amount. Unlike a traditional debit card, your payments will be reported to credit bureaus, making it possible to build your credit. After you have made your payments on a secured card for a while and you have developed a good credit score, you will be more eligible to apply for a traditional credit card.
Finding a credit card as a student may be more difficult than an established borrower with a good credit history, but it is possible. A credit card can be a great tool for building credit as a new borrower, but it is important the card is used responsibly and paid in full every month.
We have gathered some of the best credit card offers for students. So, find an offer you like, just remember, be responsible with your new plastic.