Students don’t have enough credit history so they will instantly get denied when they apply for a regular credit card. All regular credit cards require at least some credit history in your credit report. It may need at least an average credit score to get approved for a regular card. Without a credit history, you can’t qualify for the regular card but you can still get a student credit card. Student credit card has low credit limit and less interesting rewards program but they are good for building up credit. The whole point of getting a student credit card is to develop a good spending and finance management habit when you are young.
When you apply for a student card, you will be asked to fill in your school information in the application form. This means that only those who have enrolled themselves into a college/university will be able to apply for the cards. Some student credit cards can be applied by non students. The issuer may also ask you to get a cosigner to sign the credit card agreement. Cosigner is someone with enough salary and will be responsible for paying back the credit card debt if you can’t cope in paying back the balance. You can get your friend or one of your family members to become cosigner.
For the purpose of building credit score, you should use the student card for at least 6 months. You must charge the credit card on some expenses every month. As a rule of thumb, you should only spend 20% – 30% of the credit limit so that the credit card company will see you as someone who is responsible in your finance. You must remember to pay your card balance in full every month. If you do this, you will be able to quickly build up your credit score and have no problem in getting a low interest rate in the loans and mortgage.
You must be responsible in repaying your card’s balance on time. If you don’t pay your card’s balance on time, it will get reported to the credit bureau and your credit score will drop. The negative record will remain on the credit report for a period of at least 7 years. To ensure that you can pay your credit card bill on time, make sure you set a budget so that you don’t spend too much and have enough leftover to set aside for paying the bill. You can set up payment alerts on your credit card account to help you to remember to pay for the credit card bill. The payment alert can be set up on your email or mobile phone SMS. The payment reminder will automatically be sent to you on the due date.