Secured Credit Cards For Students

Many times parents want their child to have a credit card when they go off to college but they are not sure what the best type to select is. The "Secured Credit Card" is one of the best cards that you can get for your student when they are going off to college because you have better control over the amount of money that can be spent. You cannot increase the spending amount unless you deposit more money into the students account.

A secured credit card requires that you open up a savings account with the lender who in turn holds that account as a security deposit against the credit card. Most secured credit card accounts are normally around $300 to $500. You can of course make the amount as high as $5,000 this depends on how much you plan on putting into the students account for expenditures. The card is secured because of this deposit but it is still credit and must be paid according to the agreement.

This is a great way for the student to build their credit score so that they can apply for an unsecured credit later without worrying about a co-signer. It is best when you do have a credit card to make sure that you make your payments without being late. It is most beneficial for any student with a secured credit card to pay off the amount they use each month before the bill comes due. This enhances their credit record giving them a higher credit score.

When you're looking at all the types of student cards on the market, there are a few things that you have to keep in mind when applying for one. A regular card and a secured card are completely different when you compare the two and let me explain why they are different.

When you apply for a secured card, you're going to find out that the bank is going to ask for a deposit since you're at a higher risk. They are going to use this as collateral and if you don't pay your bills off each and every month, they can dip into your account and take the money that they need. This of course is going to affect your credit rating. This is why it's important to pay your card off in full each and every month.

If you do decide that you want to apply for a student card that's secured, always look at the fees as well as if it reports to the bureaus. If it doesn't report to the major credit bureaus, you may find out that it's going to be useless because the credit reporting agencies will never even know you have the card. This is why it's essential when it comes down to doing your homework. If you don't do your homework, you may find that you're using a card that you don't want. Look at the regular cards and the secured cards and see what will work out for you in the future.

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