Is a student credit card a good choice?

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After the 2009 Credit Card Act, getting a credit card as a student became a bit difficult, but this doesn’t mean that you can’t get one, as long as you meet a few requirements. Specifically, you must be at least 21 (if you’re younger, you must prove your income or have a co-signer), but there’s one bigger question left: is it actually worth it?

What are the disadvantages?

First of all, opting for a credit card as a student – we’re talking about various types here, including cash back credit cards, rewards or travel – will help you build your credit history. At first, you will have a high annual percentage rate, more than 20%, according to NerdWallet, but eventually, it will go lower.

Secondly, you should know that your initial credit limit will be low, probably somewhere around $300, since lenders want to limit their eventual risks. On the other side, paying your bill in full monthly, can help you build a good credit.

What are the factors to consider?

Before deciding upon a company that can issue a card, there are a few factors you should consider:

Annual fee: Look for a card holder that actually has no fee. Sure, you won’t get any rewards in this case, but there’s enough time for that, since you’re just a student.

Monitoring tools: A lot of companies give you the possibility to check your credit score and monitor your account. The main advantage of this is that it helps you track a progress to a great score and eventually see where you can improve.

Potential bonuses: Some cards can offer you cash rewards if you have good grades, while some may offer a higher credit line, if you’re up to date with your payments constantly.

No foreign transaction fee: In some cases, credit cards charge 3% for such transactions. If you plan to study abroad or travel, make sure you pick a card that doesn’t have a fee like this.

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