What are the best credit cards for students, should a student have a credit card and how to use it wisely.
A large number of banks offer credit cards specifically aimed at students. Should a student have a credit card and – if so – is a student credit card the best option?
Study time for many students is the first time you have full responsibility for your own finances. Many opportunities open up and at the same time many pitfalls. If you are above average updated on credit card usage, you can skip straight to Part 2 on terms, but I recommend most people read Part 1 first.
Part 1: Should a student have a credit card?
There are mainly three situations where it may make sense to use a credit card as a student:
- When shopping online: since you have purchase insurance against fraud and bankruptcy (NB: Not when you shop with private individuals).
- When traveling: to get a free travel insurance, protection against fraud abroad and so that reservations for hotels and rental cars are not deducted from the current account.
- For daily use: to save money through discounts and cashback.
- You can compare the benefits of all credit cards in United States here: https://www.creditcards.com/
Credit cards are not for everyone
In order for it to be worthwhile to use a credit card, you must be careful not to spend more money than you have. If you use the credit card as an alternative to a debit card and stick to the balance on the checking account, the credit card can save you money.
If you can not do this, credit cards are probably not for you. Using a credit card to finance a higher consumption than what you have coverage for becomes a very expensive form of loan.
In the worst case, it could make you a candidate for the Luxury Trap. Although it may feel good since you assume your salary will be high after graduation, it is never good to say what the labor market will be like when you finish.
If there are only certain situations where you lose some control over spending money – for example at a party – it is best to put the card at home in such cases.
B: Which credit card should a student choose?
Most students have somehow been offered a credit card from the bank where they have their checking account.
If you are determined to have your credit card in the same bank as you have the bank account, it usually makes more sense to have the student card than the credit card product offered to all customers by the bank.
At the same time, the advantage of having the credit card in the same bank as a checking account is quite limited, since it nevertheless functions as a monthly bill that you can usually get an e-Invoice or direct debit on.
Best credit cards for students are characterized by the fact that they often have lower fees than the bank’s other cards and relatively similar benefits. At the same time, the credit limit is usually significantly lower for student credit cards.
Watch out for these unnecessary expenses on your credit card
Examples of best credit cards for students
Some of the best credit cards for students are available here to check https://www.mastercard.us/categories/students/
Credit cards for students are less favorable than the best options
There are several credit cards for students on the market that are significantly more favorable than the classic student cards.
A potential problem is that it can be difficult to be granted some of the best credit cards for students if you do not have sufficient transferable income, which can often be the case for a student.
Nevertheless, there are cards without strict age and income requirements that beat the cards that are marketed specifically to students. For example, some student credit cards do not have requirements for income and an 18-year age limit.
Check the overview of all US credit cards before you make a choice. Choose the current age and income for you, then you can compare the terms on the cards and make an informed choice. Remember that student loans do not count as income.
Summary
Credit card is just like a useful tool. If used correctly a hammer can hit a nail, but if used incorrectly it can also hurt your thumb. Credit cards can help students enjoy useful benefits when used responsibly. The best credit cards for students are not the only option for building credit and extending financial freedom during enrollment, but often offer a more economically advantageous alternatives. In this article we have covered all the required answers to resolve following important questions:
- What are best credit cards for students
- What are good credit cards for students
- What are good credit cards for college students
- What are credit cards for international students
- Best credit cards for students studying abroad
- What are the best credit cards for college students