Starting from your college life a new thought may have crossed in your mind to apply for a student credit card. But if you are new to the credit world, you may not have sufficient of a credit history, this makes it difficult for you to obtain credit cards, in the place of usual credit card you might consider a prepaid student credit card which is the best option for you as a student, moreover, it provides flexibility of a credit card and avoids accumulating debts at the same time.
What it is
Like a student credit card, prepaid cards function in the same manner. A student prepaid credit card works in much the same way as pay as you go your mobile phone; you have to fill it before you use. No credit checks or monthly installments are required to obtain such type of credit card. The amount transferred to your student prepaid credit card depends on the spending limit. Prepaid student credit cards are not in fact credit at all. The card holder deposits money in a pre-determined account of a bank that is connected to his credit card. This is similar to how a debit card is connected to a bank account.
Uses of student prepaid credit card
The cardholder receives an actual plastic card from a bank that is connected to an account. The card can be used to buy goods and services. You can use this credit card wherever normal credit cards are accepted. Prepaid cards feature a common card brand name on them and for all purpose look and act like an actually credit card. If credit balance on the card is low or come to end, students can refill them at any time. Way to fill up these cards is through cash or check. Some card issuers also accept automatic account loading on a monthly basis.
Some facts should look out in your card
You can apply online to any issuers. Since the money is paid up-front, there are no credit checks or income requirements. But, there are some features those you should need in your student prepaid credit card. Always look for that major logo from Visa and MasterCard on your card. If it doesn’t have a major logo on it, you may find that many merchants won’t allow the card. A lot of these type cards will have a monthly fee but the good ones won’t. Student prepaid card are not like gift a card. There are many issuers, which student prepaid credit cards will help you with your credit building. So try to find that type of card and apply for that.
Advantages
- You won’t be charged interest.
- No late payment fees.
- You don’t have the risk of getting into debt.
- Well option for those with bad credit ratings.
Disadvantages
- There is a monthly convenience fee.
- You will have to pay a fixed charge to join the scheme.
- You may have to pay a transaction fee.
- Main problem is that, you do not get a credit.
So, a student prepaid credit card is very useful if you are not particularly good at managing your money, as you can only use as much as you have put on the card and cannot become in debt or go over the limit. Others, all parents find it a very useful tool for allocating a pre-set allowance to their children.