Student Credit CardsThere are many products on the credit card market to cater to all consumer requirements. The majority of credit card companies now offer a card that is targeted specifically at students, and is also a way for credit card companies and banks to generate lifelong customers.
The student population tends to be notorious for low income but with high spend requirements. Studying is an expensive business, and students have a need for increased spending power, but generally have little or no credit history. Credit cards offered to students are a lure because they provide the opportunity for greater liquid cash-flow with more flexible repayment options. Students also have a potential for higher future earnings, and this makes them attractive to credit card companies who are looking to build a long lasting customer base as well as add to their income through student cardholders who may take longer periods of time to clear their card balances. For students looking to apply for a credit card, it is highly advisable to look for a card that is suitable for individual needs. · What is the card going to be used for? Is the card for
one off large purchases or to use abroad? Is the card going to be
used regularly for general living costs for periods when immediate
cash-flow is restricted? It is also important to remember that credit cards are not an opportunity for “free money” but are a service that is charged for. There may be annual fees involved, and penalty fees for late payments and spending in excess of the approved credit limit. They are extremely useful for the purchase of goods and services all over the world, and can greatly improve the card holder’s credit rating through usage, but as with any contract to extend credit, the agreement should be entered into wisely. Some useful terms to take into consideration when looking for the right card are: Annual Percentage Rate (APR) – this is an expression of the yearly rate of the cost of credit and it is a legal requirement that the credit card company discloses this information to the applicant before signing. Periodic Rate – this is the interest rate applied to the balance on the card in order to calculate the bill for that period. Free Period – this is a period of time that allows the cardholder to be free of finance charges if the balance of the account is cleared before the due date. If there is no free period, then interest charges will be applied to the account from the date of each transaction. Annual Fees - this is an annual membership fee charged for the card. In many cases, card issuers will waive this fee if the card is in regular use above certain amount. Transaction Charges – these are additional charges that can be incurred on the card for various reasons, usually for cash advances, late payments, and in some cases, there will be a minimum fee charged if the card is not used. There are also a number of measures in place to protect the cardholder, and it is worth ensuring good communication with the card company in the event of any misunderstanding or confusion. Something as simple as an incorrect address can lead to late payment, and therefore penalty charges, so it is recommended that applicants adhere to the conditions of the card issue. The credit card company is also expected to keep the cardholder informed of any changes in terms or conditions, and in the case of overpayment should be expected to refund any credit to the card holder within 7 business days. There are also many additional products that are offered with credit cards for example, payment protection, insurance on purchases, and protection against fraudulent usage. |
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