What Is A College Credit Card

By David Smythe


You have heard millions of stories about college, and you cannot wait to be there and taste the freedom. Well, that is partially true. Young people start their lives in college, where they learn how to get ready for the future, and what to do with their education. But there are also finances to think about, because nothing comes for free. Since you are in college, you still need the help of your parents, that is why the credit card you get will be one of your parents' credit card extension.

Since the cash era is almost gone, the most probable thing that will happen is that you can get a specially designed famous college credit card. But there are certain conditions to be fulfilled in order to get a credit card in college, which can give you many benefits. One of them is learning the financial system with its ups and downs before going out on your own.

College credit cards function in the same way regular cards do, except that these are issued by card companies to students who never had any plastic money before. In fact, this is the very first card students get that they have total control of.

With this in mind, the card suppliers are risking their business in issuing cards to students who may not have a clear understanding of the whole concept yet. It is just like trusting your finances to a complete stranger whom you know nothing about his credit history.

Companies usually offer credit cards to students, even though they do not really have a credit history at hand so they can prove they are able to pay their debts in time. That is why banks or specialized companies ensure their money and their trust by usually asking the parents of the students to sign the application, so that they can be covered in case the student fails to pay in time.

For the specialized companies, which issue credit cards for students, it is pretty much risky, because what they basically do is to give a credit pass to people without any kind of credit history. They do not give unlimited access, though. Most of the companies set the limit under one thousand dollars a month because they consider it enough, and thus they learn how to control their spending habits.

What you also must know about the college credit cards is that the interests rates applied in case you pay later are higher than the usual credit card interests. And, most of the times, bills pile up without realizing it, but when it is too late.

And another safety measure of the companies is that they apply higher interest rates for the college credit cards than they do for the regular credit cards, which means that students,as well as parents may be motivated to use them properly so that everybody is happy and, what is more, nobody loses money.