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Student Credit Cards with no Credit: Ace your Quest

Young adults often find themselves at a loss when faced with the world of credit. They are still green when it comes to managing greenbacks. There are many questions that they should be asking when making choices, but with so many options available they often grab at the one that seems to shine the most without thinking things through. ‘Student credit cards with no credit’ are the first of the enticing treats that flash themselves in the students’ eyes.

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The trouble with experience is that it gives you the examination first and teaches you the lessons afterward. As with all things when in uncharted territories, tread with caution. ‘No credit, credit cards for students’ are meant to be handled with care.

If you are a young adult, then this article will serve as a guide to you as you go around gaining financial independence and discovering yourself. We will talk about how ‘student credit cards with no credit’ help you.

What are credit cards? Are there special student credit cards?
Credit cards are instruments of convenience; however, they can if used incorrectly, become weapons of mass destruction.

‘Student credit cards with no credit’ can help or harm depending on use.

Credit cards are plastic cards that replace the need to exchange money at financial counters.

But then you already know that.

Plastic is of different kinds – a credit card gives you money without asking you the questions first, a debit card on the other hand asks you the questions first and coughs up money later. Student credit cards with no credit are special cards designed to serve the young adult’s need.

Debit cards allow you the same convenience that a credit card does however you have to deposit money in the bank in your account and it is this money that funds your debit card. Once you have exhausted that money, your debit card will not be of any use till you refill your account. It is an excellent way to get attuned to the feeling of using plastic instead of paper. It may and probably should serve as a prelude to acquiring a ‘no credit student credit card’.

Credit cards on the other hand extend you a rotating line of credit. This basically means that you can use the card for your financial needs even though you may not have any money on you at the moment, or have any in your bank account. This does not mean that you are getting this for free. You do have to pay the money back within a grace period extended by issuing company. If you fail to do so, you have to pay interest on that money and these interest rates are much higher than if you had taken a loan from a bank.

Without the necessary experience in dealing with this new financial expedient, you may find yourself in a mess with large debts that haunt you for long. My words may not seem very significant right now, however, when you learn more you will understand that responsibility and power go hand in hand. Just like Peter Parker did. Webs are of many kinds, and financial webs create sticky situations. Handle your ‘student credit card with no credit’ with care or you may have to face unpleasant consequences.

The Law
The government has introduced some important laws to help the student and to see that your financial inexperience does not harm you.

It is now mandatory that you may not be issued a ‘no credit student credit card’ under the age of 21 unless you have someone co-sign the application. This could be a parent, a friend, a relative or somebody else.

You could still be issued a ‘no credit student credit card’ on your own provided you show a known source of steady income. (Summer jobs are not included).

What is credit? What does no credit mean? What is a credit score?
Whenever you are party to a transaction that involves the use of credit by means of a loan such as home equity loan, or a credit card, your behavior with regards to repaying the loan is being recorded. These records are maintained by agencies which prepare a report about you and your financial behavior. This report forms the basis of a score commonly known as a FICO score, which is used by any lending institution to give you credit, i.e. to loan you money.

Your score is a reflection of your credit i.e. it indicates your credit worthiness or your likelihood of paying back your dues with responsibility to the lending agency. The higher your score – the better the rates of interest offered to you and this applies everywhere even in the purchasing of mobile phones – you will get better deals if your score is high. Credit cards such as your ‘no credit student credit card’ can serve as means to establish your credit worthiness.

You can only have a score when you have used credit and you can only use credit when someone gives you credit. However, people will not lend you a loan without you having an established credit score. The term no credit means that you have not yet got a credit score or that a report of your credit activities is still to be prepared.

I know all this sounds confusing but don’t get too overwhelmed. For the time being, just understand that people will lend you money only when you show the ability or the propensity to pay their money back.

There are special credit cards that credit card companies issue to students where they do not demand to see your credit score, for they know that you haven’t had time to establish one yet. These cards are commonly known as student credit cards with no credit.

This means you are eligible for a credit card even though you have no credit.

The new laws require an additional eligibility criterion as I mentioned before and that is to have someone co-sign the application if you are under 21.

What is APR?
APR stands for annual percentage rate. This is the rate of interest that you will be charged on your purchases if you fail to clear your balance in full within the grace period. Also any cash advance you take i.e. any money that you withdraw to buy something does not have any grace period and hence here the interest starts accumulating as soon as you withdraw it. Hence do not take cash advances on your card. I repeat – do not take cash advances on your ‘no credit student credit card’ unless there is an emergency… and that does not include a pretty girl.

When selecting your ‘student credit card with no credit’, see that you take one with least APR. Also be aware that some student cards with no credit have lower APR (sometimes even 0 APR) for a short period only, after which it zooms up. So pay attention when selecting your ‘no credit student credit card’.

How best to utilize your card?
It is a good idea to use your ‘no credit student credit card’ to pay certain expenses that you regularly face, such as for gas. This allows you to keep track of your expenses and also allows you to budget such expenses.

When choosing a ‘student credit card with no credit’, look for one that offers rewards. Some ‘student no credit, credit cards’ offer rewards in the manner of points every time you use the card. These points when amassed allow you to get something on offer in exchange for the points; like a gift for your girlfriend. Some ‘no credit student credit cards’ allow you to exchange the points for purchasing air miles. This means that if used correctly you could get a free trip home for the holidays.

Payback your dues within the grace period.
It is extremely important to pay your accumulated balance in full within the grace period.

You may not realize it but it is very easy to go overboard on expenses, and suddenly with missed payments you may find out that you have accumulated a huge amount of debt; and debt causes a lot of stress. Stress that you don’t need… it’s hard enough with your tuitions and peer pressure and acne without you getting more problems.

A ‘student’s credit card with no credit’ should reduce your headaches and not add to them.

A word on financial responsibility
Up till now you have been using money with your parents’ guidance. This is your first step to financial freedom. Handle the freedom with responsibility.

A thing that you may want to learn is also that you need not gratify your every whim immediately. Delaying, planning, and budgeting are the adult way. Time to join the adult world with your head held high.

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