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Posts Tagged ‘student credit cards’

Card Issuers Scale Back On Student Credit Cards

August 12th, 2009 by Matthew C. Keegan | 3 Comments | Filed in College Budgeting

There once was a time when credit card issuers would sign up college students, issuing credit lines to them well before they were ready to graduate. Some students showed a limited amount of income and were still approved, while others were able to open up accounts with a parent acting as co-signatory. In some circumstances students received cards with no proof of income, putting themselves in a precarious financial state while still in college.

No Easy Credit

credit cardsThanks to the financial bubble burst of 2008, easy credit is a thing of the past, especially for people who have no means to repay their debt. Certainly, if your credit is very good or excellent, then you may still get approved for a new credit card, but that also means that you must have the financial wherewithal right now to make payments. Clearly, most college students do not and are often saddled with other debt including student loans.

Changes in consumer credit laws are also weighing in. Earlier this year Congress passed legislation that  was signed into law by President Obama putting new teeth into consumer protection including restricting card issuers who market their cards on campus.

Law Takes Effect February 2010

Some parts of the new law are already taking effect but by February 2010, college students who apply for credit cards will find additional roadblocks in place. These include proof of income, the ability to repay the loan, and if under the age of 21, have a parent or other responsible party cosign the application. This will also mean that if the student defaults on payments, then the creditor will turn to the cosigner to pay the debt.

The new law will also forbid credit card issuers from giving away on campus freebies including pizza and tee shirts to corral students. And, it will also curtail sudden increases in interest rates, moves which have scuttled the creditworthiness of many students down through the years.

Watch Out For Affinity Cards

What the law won’t protect students from are those affinity card contracts where schools sell student information to card issuers in exchange for a sizable fee. For example, the Michigan Alumni Association gets a cut in on credit card purchases for people holding its card, amounting to millions of dollars over several years. That practice is still in place, so be careful – your own college could be picking your pocket!

Of course, without easy credit available, students will have to watch their dollars and cents closely, but that will only serve to help them later on in life when they purchase a new car, buy a home or make some other major consumer purchase requiring financing.

Adv. – Are you heading off to college this month? If so, visit OfftoCollege.com for tips and related information to help make your transition a smooth one. Check out SayCollegeMove.com to help you to save money on the things you want to buy.


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Student Credit Cards, What You Need To Know

September 15th, 2008 by Matthew C. Keegan | 4 Comments | Filed in Personal Advice

Is a credit card for your college student a good idea?

That question can only be answered by you, a parent or guardian who knows what level of responsibility your adult child can handle.

Credit cards for students have been around for quite some time, offering a way for students to cover student credit cardsome of their expenses without carrying a lot of cash. Knowing that your child has access to a credit card when their car breaks down in the wee hours of the morning can be reassuring as that piece of plastic will allow the car to be towed back to campus or to a local garage.

But with any consumer lending option, shopping for student credit cards means comparing offers. That means you shouldn’t rely upon whatever offer comes in the mail nor should you feel compelled to use your current credit card provider. Credit cards for students, especially those who take your adult child’s current educational needs into consideration, can be useful provided they offer the following to you:

  • A low or zero percent introductory rate.
  • No annual fees.
  • Rewards points toward discounts at hotels, car repairs, entertainment items,etc.
  • Electronic payment options and electronic statements.
  • A grace period to allow your student to pay the credit card balance off every month without incurring interest charges.

Some student credit cards require that you, the parent or guardian, co-sign the credit application with your student. Others may try to tack on a higher interest rate or charge other fees if your child has little or no previous credit. You can always negotiate directly with the credit card provider to ensure that the interest rate you receive is the lowest one possible.

Finally, you will need to work out a plan with your adult child on card usage, budgeting, payments, etc.

Securing a student credit card can be an education lesson all by itself. Make certain that everyone understands what is required of each party and use that opportunity to help your adult child achieve a measure of financial freedom.

Adv. — Does your college student need a credit card? Shop around to find and compare the best offers, deals that can benefit your student and help them as needed. Please visit SayStudent.com for the information you need to find the credit card that is right for you adult child.


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Student Credit Cards For Life’s Emergencies

August 1st, 2008 by Matthew C. Keegan | 3 Comments | Filed in College Budgeting, Personal Advice

Your student son or daughter is heading off to school in a few weeks and everything is in place. You’ve seen to it that clothes have been purchased, a new laptop has been ordered, and that the student loan application has been approved.

student i.d.One thing still needs to be done: how will your child access money to pay for books, fees, and incidental expenses while away from home? An ATM card and/or debit card can be very useful, but what if an emergency comes up?

What About An Emergency?

Obtaining a credit card can be an excellent way to provide for emergencies. Instead of carrying around a bunch of cash or losing valuable time while you try to wire him some money, a credit card can help your student get out of a jam right away. Instead of receiving a call at 3 a.m. from the hospital emergency room asking you how you will pay for their treatment, your son or daughter can handle the problem on the spot and contact you later.

Compare Credit Card Offers

When shopping for credit cards, you’ll want to compare offers. Credit cards for students, especially those issuers who take your child’s current educational needs into consideration can be useful, particularly if they offer the following benefits to you:

  • Low or zero percent introductory interest rate.
  • No annual fees.
  • Rewards points toward airline miles or discounts at hotels, cash back, and more.
  • Electronic payment options and electronic statements.
  • Flexibility: a grace period to allow for your student to pay the credit card invoice monthly without incurring interest charges.

In some cases, student credit cards will require that you, the parent or guardian, co-sign for your child. Without your signature, most issuers will charge your student a higher interest rate if he has little or no previous credit. You can always negotiate directly with the credit card company to ensure that the rate you receive is the lowest one possible.

Managing Credit And Your Money

Of course, you will need to work out a plan with your adult offspring on credit card usage, budget, making payments, and more. Obtaining a credit card for your college student can be an education in and of itself, one that can help them build up their own credit while allowing them to make decisions on how credit is used.

Adv. — Need money for college? Explore your financing options with SayStudent.com today!


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