Different people have different needs. So credit card suppliers also have designed various types of cards. In addition to normal credit cards, there are small business cards for small businesses and then there are student credit cards specifically designed for students.
Now, what’s different about a student credit card?
You can say not much, because all credit cards work in pretty much the same way and are used for more or less the same purpose. However there are 2 main differences with student credit cards and these differences are on 2 main aspects namely credit limit and APR
Credit limits for student credit cards are generally very low. These usually range from $ 500 PENGELUARAN SGP $ 1000 per month. Some people might argue the reason for the discrimination. Well, the reason is very clear and clear. Most students applying for credit cards have never used a credit card in their lives so they also do not have credit ratings and or knowledge about credit cards. While the former is what credit card suppliers look for before supplying credit cards, the latter is what credit card holders want to obtain. Both objectives are met by maintaining a lower credit limit. Credit card suppliers reduce the risk that they take by issuing credit cards to someone who has never used one and does not have a credit rating. It’s good for credit card holders too because it reduces the risk of damage that can be caused by limited or no knowledge of credit cards and by bad shopping habits. In addition, this credit limit will be sufficient for the needs of students in general.
The APR on a student credit card is generally higher than that on a normal credit card. Again the reason for this is the same as for the lower credit limit ie the credit card company or credit card supplier is after all into business and must take steps to reduce risks that may include risks arising from issuing credit cards to someone which is naive in terms of credit card knowledge.
Credit card companies may also keep some stringent terms and conditions on student credit cards and generally require a parent or guardian’s signature as a guarantor.
Since credit cards are more of a necessity than convenience in today’s world, many student credit cards are recommended, especially as a means of learning in getting students prepared for life. Due to their inherent characteristics of low credit limits etc., student credit cards cannot lead students into debt situations that cannot be changed at all. Students must read all instructions included with their student credit card. This first credit card will teach them how to protect themselves from credit card fraud, where all use their credit cards, how to control their expenses, what the various benefits of membership are etc. The earlier they learn these things the better it is.
In addition, a student credit card will also help you in developing a good credit rating. You don’t have to take a lightweight student credit card. If you spread money on a student credit card or default on your credit card bill payments, you will not only end up paying interest on your credit card balance, but also damage your credit rating. Remember that a bad credit rating will not only hamper your chances of getting another credit card in your future, but will also cause problems in your mortgage / car-loan application approval etc.
So a student credit card is definitely a good way for students to start with a credit card.