Majority of students attending colleges are not satisfied with the credit services that are available in the market nowadays. Companies that issue credit cards to students are trying to come up with a better strategy that can suite both the students and the company in this industry of plastic money. Therefore majority of students always intend to keep on looking credit cards that will be suitable for them without causing any inconvenience to them. That is in terms of the charges that they have to incur while using the credit cards for the daily activities so as to avoid extra charges that would interfere with their budget hence inconveniencing them economically. According to Matt Schulz who is a respected senior analyst for Credit Cards .com, majority of the companies that offers students’ cards are shifting their attention towards rendering a more friendly credit rates packaged with a competitive reward for the students.
For example Matt Schulz goes ahead and elaborates further that 13.4% is an average rate of the student card. This was reduced from the previous rate of 16% after the Credit Card Act was put into effect to favor the students who are using the credit cards. This move has greatly reduce the percentage of the credit cards that the students are using for their daily routine services compared to other credit cards that are available in the market for other people who aren’t students.
Several measures have been put into place according to the Disclosure Act of 2009 so as to put considerations and ensure that consumers are not exploited with the service providers. This act ensures that a consumer gets the best services that they ask for at every given time that they ask for the services. For example consumers that are still below 21 years of age are still eligible to have a credit card provided they have a verified and approved income source in case they are working at the same time arranging for plans to attend their lectures in colleges.
Companies that are issuing credit cards to students always use the strategy of lowering down the rates that will be favorable to the students to allow them have more access of credit card services at minimum cost. This is the most strategic way of attracting students to use credit cards that are readily available in the market.
Majority of the companies have come up with attractive packages as a modern way strategy that will keep on attracting students to use their credit cards. Some of these strategies includes offer and bonuses point for the consistent use of the same credit card since the student joined college. This means that the student have to stick to the same company credit card for a period of time or years to qualify for the bonuses. Other measures of rewarding students includes targeting new account holders who are fresher’s in the college and are intending to open an account with a particular credit card company.
The following are some important tips that are very useful to any student in college who is willing to shop around for a perfect credit card that suite the demands while in college.
1) Be very cautious with the signing bonus that is offered by some credit card companies.
As we had discussed earlier, majority of credit cards companies always intend to lure students by offering bonus to students who makes a maximum use their credit cards. The companies always target the students to maximize the use of the credit cards before they are being awarded the bonus offer. The offer is not including the student payment of college fee therefore the student has the task of doing other form of shopping to win the bonuses. In return, this will automatically lead to over expense since you as a student will need to spend more money in your credit card before you are awarded the bonus. In the long run, you will find out that you have overspent and you have surpassed your proposed budget with the aim of getting a bonus. Therefore, you should avoid overspending as much as possible since the bonuses gain aims at draining the amount of cash that is in your credit card so that you can top up the credit card again once it is cashless. You will realize that your budget is interfered with hence you become a big spender and the company offering the credit card services is benefiting from your account heavily. It is needless to spend more beyond your budget to get a bonus, always work within your budget limit.
2) Think twice before you pick the limits of 0% offers.
The 0% offers that are offered to the students are always very tricky at times and students should always have a second thought before picking such offers. For example some of those offers last for a shortest period of time like six months or can even sometimes move up to a year or so. The offer at times is not applicable since it will not favor you as a student. You may come to realize that the offer is on when you are busy preparing for your main exams, term papers or even continuous assessments test in college hence by the time your mind is free with exams, the offer is also over hence you end up losing the offer without using it as you had intended to do so earlier.
3) Give credit union considerations since they can have affordable rates to students.
Credit unions that are formed within the university always have a better deal since they are part of the university and they aim at offering suitable and affordable services to the students within their colleges. As a student who wants to save more and limit the misuse of your available financial resources, you should take a look at the trade union and give it a second thought since it can be an ideal financial plan for you as a student.
A perfect example is the University of Michigan Credit Union, whereby it has a credit union known as a visa platinum optimum card with a rate of 8.9% that’s offered to all credit union members. This card comes with a reward rate of 12.9% that is favorable to all students that are members of this trade union within the college. The trade union also ensures that there is no annual fee and no charge for balance transfers to the members. Moreover, there is also a 1% fee to convert foreign transactions into U.S. dollars to any student who is willing to covert fee before payment to the college.
4) Always check on the fees and rates.
It is important to note that your percentage rate can go up when you are not aware and this can interfere with your entire budget plan that you have. This is because some credit cards that students buy do not have an annual penalty rate and there might be need to pay some fees as a penalty for late payment fee which at times can go far beyond your expectations hence you end up spending more money than what you have in your budget. The rates are also at times boosted at high levels by economist years to come and this will always continue to affect your proposed budget as a student. At times the rates can go even higher beyond your capacity to pay them hence affecting you financially. This is because the rate of different cards varies according to the company rules and regulations.
For example the Capital One Journey Student Credit Card offers a rate of 19.8% .The card is also designed in such a way that it does have a credit tracker that focus to help the students monitor their credit score, as well as other tools to help students use credit wisely within their budget timeline. Furthermore, the card also comes with a package of 1% cash back on purchases, plus an extra 0.25% cash back if payments are made on time with the student.
According to Andrew K. Johnson, who is a spokesman for GreenPath Debt Solutions, a nonprofit credit counseling agency, he argues that too often college students won’t shop for interest rates on credit cards. Instead, the students will take whatever is offered to them. He also added that it is easy for debt to build when rates are higher and when students don’t effectively manage their money appropriately.
5) Note that a variety of interest rates can be given on student credit cards.
There are varieties of interest rates that can be given to students on credit cards. For example, the Citi Thank You Preferred Card for College Students offers a range of rates of 13.99% or 18.99% or 23.99% on purchases depending on the student creditworthiness. Always remember that those rates will vary with the prime rate. The card has a 0% intro rate on purchases for seven months from the date of opening the account and the penalty Annual Penalty Rate is up to 29.99%.