A student credit card as many people may believe is just another way for credit card companies to allow people to spend money they don’t have, personally I find this notion a little far fetched, and I think this is simply a case of a few irresponsible individuals giving a whole community a bad name, a student credit card is designed especially for students, it does not have a very high credit limit, and most student credit cards are designed to help students take care of their day to day expenditures. The biggest plus point a student credit card has is, that a student credit card usually incurs little or no annual fees. Since the recipients of the credit cards more often than not do not have any previous credit history, there is usually a co-signer required, the co-signer is usually the legal guardian of the person receiving the credit card.
A student credit is basically designed to help students, who have more often than not started earning yet and the credit card provides them with vital cash flow for expenses like tuition fees and for buying books etc. In fact the reason why a student credit card has a low credit limit is because the credit card company understands that the users of the credit card are probably first time users, and have very little or no prior experience with credit cards. The average credit limit of a student credit card is around $3500, some credit card companies however offer a limit of $5000 as well.
The advantage of having a student credit card is that student credit cards come with specialized reward points programs, like savings or cash back on stationery purchases, or it could be added frequent flier miles for students who are living overseas, or away from home. In either case just like business cards, executive cards even student credit cards are tailor made to meet the requirements of students. The added advantage of a student credit card is that a student credit card usually offers 0% APR for a limited period of time; so that any expenditures that the student makes while he or she gets setup is taken care of without paying any additional interest on the installments.
Almost all major credit card companies offer student credit cards and student credit cards available are usually further categorized depending on the kind of purchases the student is expected to make, for example there are specialized credit cards that offer cash back on fuel (ideal for students who drive to class everyday), and there are student credit cards that offer discounts on Apparel, DVDs etc. The idea is to pretty much cater to all the expenses a typical student would incur. The added advantage of a student credit card is that responsible spending, and timely payment of credit card bills, actually helps the individual build up a credit card history before he starts working. So by the time the individual is ready to get a personal credit card, the credit card company already has a complete credit profile of the individual.
The only criticism of a student credit card is that since the student credit card is reported to the credit bureau, often students being young and a little irresponsible do not tend to take monthly payments of their bills to seriously, and hence by the time they are ready to get a personal credit card, they have already done some amount of damage to their credit history. This criticism is just, but once again, it all boils down to the individual, and just because there are a few students that suffer due to their own negligence, there should be no reason to rob other students who can greatly benefit from a student credit card. There are numerous checks in place to ensure that students don’t overspend, and having a co-signer is just one of the ways a credit card company makes sure that the parents or legal guardians are informed of all developments too.
In conclusion, all that can be said, is that student credit cards are a fantastic way for students and their families, to allow the students to pay for their expenses and fees during their student years; without having to worry about cash flow problems. The pros of a student credit card far outweigh the cons.