Secured Credit Cards and Credit Management 101 For Students

By Leni Parrish on October 13, 2010

Young people are the usual ones who have difficult cases of getting approved with loans. With the huge expenses in school, sometimes kids nowadays take part-time jobs, borrow from friends and apply for scholarships. The problem is, not all students have enough time to go to work especially when they are getting too much projects to work on and school classes to catch up. Some students don’t have enough rich friends whom they can borrow money from. Let’s face it. The world is not an easy place to live if you don’t have money. But if you don’t have money, there is always credit. But the other problem is, if there aren’t enough sources for credit, it gets us back to the problem of having no money.

This brings us to the question: How in the world can the students be able to get financially supported with credit cards?

Secured credit cards offers are good solutions for students who are building their credit history by scratch. Some companies require students to have their own savings account in the same company, though other would simply require a bank account only. But usually, they would only require the students to provide a deposit. Students should choose the company properly, even if they have the money for the deposit but do not have a savings account, they will get denied easily.

The good thing about secured credit cards is that they are good foundation for establishing a credit history. Those without credit history have lower probability in getting approved with their application for credit and loans, insurance and even employment. Through a secured credit card, these people are given the opportunity to build their own credit history and start with good records.

Some students fail at this, especially with their “vibrant and youthful” lives. They can get unwise buying decisions, buying things they think they need, but actually ‘want’. Here’s where the responsible adults come in. Yes, they usually take form of the parents. Credit management is a course that each credit card holder has to take. Not seriously in a formal class, though. But it can be something that is taught by others or themselves. In the case of students, parents should teach their children the proper ways of handling credit.

Students, on the other hand, must take the lessons seriously. A credit card is not just a plastic spending thing. It is a plastic card that is used for spending but should be paid later on. This fact alone is the basic lesson of credit management.

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