Student Credit Cards vs. Regular Credit Cards: Key Differences

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Understanding the Differences Between Student and Regular Credit Cards

At O1ne Mortgage, we prioritize consumer credit and finance education. This post aims to provide an objective view to help you make the best decisions regarding credit cards. For any mortgage service needs, call us at 213-732-3074.

What’s the Difference Between a Student Credit Card and a Regular Credit Card?

Student credit cards are tailored for students who may have limited credit histories and different financial priorities compared to non-student cardholders. Here are some key differences:

• Credit Limits: Student credit cards typically have lower credit limits, often starting as low as $500, reflecting students’ limited earning potential while in school.
• Fee Structure: Many student cards do not have annual fees and may waive the first late payment fee to help students adjust to regular bill payments.
• Perks: Student cards often offer rewards on categories like streaming services, groceries, and gas. Some also provide introductory 0% APR offers, which can be beneficial for those with little to no credit history.

Regular vs. Student Credit Card Requirements

The requirements for obtaining a student credit card differ from those for a regular credit card. Here are the major differences:

• Student Status: You may need to prove that you are currently attending or have been admitted to a college.
• Income: If you are between 18 and 21, you need to show independent income or use a cosigner, although cosigners are less common now. Student cards often accept various income sources like grants, scholarships, or allowances.
• Credit Score: Student credit cards may require fair credit or no credit score at all, recognizing that students may not have extensive credit histories.

Other Ways for College Students to Build Credit

If a student credit card is not an option, consider these alternatives:

• Secured Credit Card: These cards require a cash deposit that typically becomes your credit limit, making them easier to qualify for.
• Authorized User: Ask a friend or family member to add you as an authorized user on their credit card to benefit from their credit history.
• Experian Go™: This service helps you establish a credit report and get credit for bills you already pay, such as rent and utilities.
• Student Loan Payments: Making timely student loan payments can also help build your credit.

FAQ

• Do Student Credit Cards Build Credit? Yes, they can help build your credit if used responsibly.
• How Long Can You Have a Student Credit Card? You can typically keep a student credit card as long as you are a student, and sometimes even after graduation.
• Who Can Apply for a Student Credit Card? Generally, students enrolled in a two- or four-year college can apply.
• Can You Get Approved for a Student Credit Card Without a Job? Yes, if you can demonstrate other sources of income.

The Bottom Line

If you’re ready to start building your credit, a student credit card can be a great option. They are often easier to obtain and come with lower credit limits, reducing the risk. Remember, the key to building a strong credit history is to make all payments on time and keep your spending low.

For any mortgage service needs, call O1ne Mortgage at 213-732-3074. We’re here to help you make the best financial decisions.

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