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Shop Canada's Best Student Credit Cards

Student Credit Cards

After a while, you get tired of relying on the allowance your parents give you or the minimum wages you're getting from your part-time job and yearn for something more. You want money in an instant and to be able to spend on your favourite things without asking. A student credit card empowers you with spending control, but also requires responsibility and maturity to maintain that control. When used wisely, your card can be an efficient money management tool, allowing you to start building credit and even score discounts as well as perks. Here’s what you should know about student credit cards.

What Are They and Their Benefits?

As you head off to college and look to establish your credit history, student credit cards are useful tools to start with. A student credit card is like a regular credit card but is tailored to your financial constraints as a student.

Given you have no credit score to your name, you might wonder why financial institutions would take the chance on giving you a credit card. The fact is, issuing student credit cards breeds future customer loyalty as the better the card is, the likelier you are to stick with that institution. You get accessible financial resources that allow you to pay for your schooling needs. Plus, should you pay your balances on time and build a solid credit score, you can get closer to renting your first apartment or securing a car loan. You can get a money back credit card that allows you to collect cash after spending a certain amount. Some student credit cards offer AIR MILES so you can save towards a dream trip to celebrate your eventual graduation.

You can qualify for other loans that enable you to make major purchases, plus maintaining a good credit score makes you look reliable to employers. As a result, you could be securing a better job if a potential employer sees your financial information and likes the fact you’ve been sustaining a solid credit line. It is important to note that student credit cards are unsecured and don't afford you the protection that a secured alternative does. However, some student cards come with a financial education component to help you learn how to manage your card and make sound decisions with money going forward.

How Do Student Credit Cards Work?

First off, you have to fulfill some basic requirements before you can start using your card. You must be 18 years of age or older to apply for the card, and you can apply online or by mail. Your application is a legally binding agreement, and you can't sign such as agreement if you're under 18, unless a parent or guardian signs for you. You must fill out your school information and show proof that you possess or earn enough money to support yourself. You can have a co-signer who is 21 or older who shows the ability to make payments on your behalf, if necessary. But, it helps having done a summer job or doing a part-time job while in school to be able to use and pay off the card at will. It builds trust with your bank.

Many student cards come without an annual fee but do come with purchase interest rates bordering on the 20% mark. They also come with purchase protection and extended warranties to protect you against fraud or theft. You will find that cards for students offer high cashback rates within the first few months, then around a 1% cashback rate on other everyday purchases. Or, you can land some bonus rewards in the case of cards that offers AIR MILES.

Student credit cards also come with discounted offers as you can get 10% (and upwards) off at select stores or restaurants. Furthermore, you can earn SCENE points whenever you swipe your card at the theatre and even get some free movies with your friends along the way.

All these perks require that you spend a good amount and sometimes can lead you to spend more than you're capable of affording if you don't read terms beforehand. Be as diligent as possible and ensure you're getting the full worth for these benefits once you sign up for a student card.

Who Should Apply for a Student Credit Card?

Apply for a student card only if you have the discipline to use it or are willing to acquire that discipline over time. Many younger people look at a credit card as a way to escape paying for something right away and as a way to avoid using the cash they don’t have. Using these or any credit card irresponsibly can destroy your future financial freedom. Get one that you know you will be able to maintain a balance with, clear it on a regular basis, and build your credit score to achieve the long-term goals you have.

Don’t use your card to buy for your friends because you can never be sure that they will pay you back. Settle on a manageable limit and read your credit statements at least once a month to check for any inconsistencies. Payment history and credit use are the most important factors in determining your credit score. If your credit score is found high enough, you could add a regular unsecured card to your collection and enjoy greater benefits. Your credit limit could also jump from the time you start school until you become a senior if you establish a great credit record.

Choose a credit card with no annual fee and interest rates that don't offset the cash or points you accumulate while using the card. You can also schedule pre-authorized automatic payments from your bank account to pay off your card if you're up against time. A good student credit card can prove a vital first step to creating a brighter financial future for yourself and your loved ones.


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