Specifically designed with students in mind, student credit cards are ideal for allowing students to enjoy the convenience of a card while imparting the importance of using credit responsibly.
These types of cards are also commonly known as student cards.
They are a valuable first step towards financial independence and responsibility.
They teach college students about using credit which are not merely an extension of their parents cards.
This is something which many students are proud of - their very first card! In a way, this is a rite of passage; a step towards adulthood.
Essentially, they work the same as do all other ones.
There are some differences between the two; these distinctions arise from them being issued to people who normally have no prior experience with credit or indeed, credit history.
The suppliers are taking a bigger risk by issuing to students than they are with issuing them to other customers.
Students are not universally known for their responsibility.
The issuers know that they are taking a chance with students, with no assurance that they will receive payment on time - or at all, for that matter.
To compensate for this higher level of risk, the card issuers will sometimes have parents co-sign for these cards, giving them some kind of guarantee of repayment even if the student in question is unable to make their payments - the parents are then liable in this situation.
The credit limit on some of them also tends to be significantly lower than for other types of consumer cards, usually between $500 and $1,000 per month.
A higher APR (interest rate) is also assessed on student cards as an additional measure of risk management by the issuers.
These rates are in fact typically far higher than for any other card.
This high APR has a purpose - to try to prevent college students from overusing their cards and ending up with a balance which they are unable to pay.
Really, though these limitations work in the students' favor, as they might not as thrilled as they were about them when they first applied.
The idea of these student credit cards, after all, is to teach younger people how to properly manage their credit and can help students to build a good credit rating for themselves; something which will be invaluable later in life.
The student card is something which should be considered as essential for the college freshman as well as other student needs such as a computer, and cell phone.