Student Cards for Building
Credit - Understanding The Options
If individuals have
Credit, how can they
tell which Student Cards
to pick when there are so many options?
The information below will break down several varieties
of cards to offer a useful understanding
of the pros of each:
Cash Back - With a Cash Back
card, customers are rewarded with a repayment that is the same as
a percentage of their transactions. For instance,
if there is a Cash Back
option that offers 5% cashback
on supermarket, fuel, and drugstore
purchases, as the rewards accumulate they earn cash value. If you
use one hundred and fifty dollars in petro, supermarket items,
and drug store purchases every week, at
the close of a 12-month period, $390
in rebates would have accumulated.
Rewards Points - In lieu
of rewarding customers with money back, some issuers
offer redeemable rewards. Customers receive
rewards for making purchases. As purchases are made, the points
increase. Once a specified number of points have accumulated they can be redeemed for perks like
free rental cars, gift cards, magazines, and more.
Always check to see if the Student Cards
for Building Credit you apply for offers
Petro Rewards - Lenders
are often times considerate of the cost
of gas and will offer an incentive to
people for using their credit card by giving them a free
gas card. As the credit card is utilized, reward points add up. Once enough points have been earned they can be redeemed for a
free prepaid gasoline card. Sometimes, redeemable fuel rewards can be accumulated
while making gas purchases.
Points for Free Hotel Stays, Rental Cars or Frequent Flyer Miles - When purchases are made with these cards, redeemable points that can be cashed in for free travel miles are earned. After an accumulation of a certain number of points, they can be applied toward all kinds of travel arrangements including free air travel. Frequent travelers really like these rewards.
Zero Percent Introductory Rates - What does this mean? Simply put: for a limited time, finance charges are not incurred.
The period where no finance charges are being applied usually spans 6-12 months.
Smart people are advised to utilize promotions such as this
to transfer their balance from their current Student Cards
to one of these, then pay it off while there are no finance charges being accrued. Making monthly payments on time is very important.
When a payment is paid late, generally
the interest free rates adjust to an interest-bearing
rate. Customers that are applying for
Student Cards for Building
Credit, and have the chance to get an introductory period free of finance charges
ought to consider this option.
Secured Cards to Re-establish Credit - Customers with one of these
would put a specified amount of cash into a secure account that accumulates interest.
This account serves as the security for the issuer. Once the account is set up, a card is
sent with a credit limit that is the same as
the amount that has been deposited in the account. Each time you swipe your card the credit limit decreases, low rate
recurrent payments are computed, and a bill
is generated. If the card is active you will receive a payment plan. Secured Cards to Re-establish Credit
are great because they perform like
ordinary credit cards allowing you
to do things that debit cards may not, like making travel arrangements like rental cars
that typically do not take standard bank account
cards. When applicants have bad credit approval is usually
guaranteed despite your credit profile. This is good because many
secured card companies report the way you pay your bill
to the credit bureaus. This can be a wonderful
practice to show creditworthiness by paying regular
payments whether you have Building
credit or not. After making
six to twelve consecutive timely payments, some secured card companies will approve a higher limit without
requiring more cash to be put into the account that was used to set up the card.
Pre-paid Credit Cards - With
a Pre-paid card, there is no guesswork. Just like
a conventional account, a certain amount of money is deposited into an account and that becomes
the amount that can be spent. As the prepaid card
balance is used up, simply put more cash into the prepaid account and your card will be ready for use once again. These cards
are great for staying on a budget, they offer the kind of flexibility that debit cards have, and they are a great solution for those that cannot
acquire a traditional depository account.
Quick approval is usually not a problem despite
your bureau report and there is
no need for the prepaid card issuer to contact the credit bureaus.
With all of the different varieties
of Student Cards
for Building credit and
benefits that are offered, there is a solution available for most credit card seekers. Look for
Student Cards that make sense for your situation that will allow you to control your spending habits. Once you are approved always
try to keep your purchases at less than half of your credit limit and make more than the minimum payment every month. Good credit is a terrific
thing to have.
To guarantee that you keep growing an awesome FICO score, take heed to these general directions:
1. Always have a balance at a percentage of the
card's limit. Another way of saying it is, don't
"max out". Experts agree that consumers should maintain
a bill that is about sixty percent or less
of the maximum spending limit on any
Student Cards for Building Credit.
2. Do not default on payments. Even if you cannot make more than the minimum payment due, that will be just fine. When payments are made more than 30 days late, that information must be forwarded to Experian, Equifax, and Trans Union. This negatively affects the consumer's credit report. As a result, when this happens you may also have to pay a higher interest rate as a consequence of a solitary tardy payment. Thus it is wise to be mindful of the due dates.
3. Pay the balance in total every few billing cycles.
If the card is used a lot, do your best to
pay the balance back down to zero at least once a year. After completing this, it is okay to
begin creating transaction activity (like buying gas, shopping online, or making purchases) then pay it back down to zero again after a few months, and keep utilizing this approach as you complete your monthly budget and annual financial plan.
This pattern demonstrates to the issuers
that you can be an excellent credit candidate. You could also be rewarded with
lower rates, more of a limit, and a higher FICO score.
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