How to Choose the Best Student Credit Card

When you leave home to go to college, becoming a student, you become more responsible for yourself. You need to take care of your own needs, from grocery shopping to doing the laundry on your own. You also become more responsible for your financial situation. You need to start building credit, and learn how to manage your money and your financial reputation. One way to get started down the right financial path is to get a good student credit card.

Choosing the Best Student Credit Card

One of the difficulties associated with student credit cards is the fact that you haven't established credit. This can make it difficult to get a credit card with a good rewards program. (In the U.S., you will have to get a co-signer if you are under 21 and don't have a job.) The good news, though, is that it is possible to find the best student credit card for you, allowing you to take advantage rewards and low annual fees.

When looking for a Canadian student credit card, you will have to expect to pay an interest rate of between 18% and 19%. However, many student cards come without annual fees, and you will find that they also come with rewards programs that can be reasonably generous. When looking at rewards, make sure that you choose a student credit card with a flexible program that you are likely to use. Points can usually be redeemed for travel, merchandise, concert tickets and even cash.

When choosing a student credit card, see what kind of promotional APR is offered, and how long it lasts. You should also be wary of choosing a student credit card based on the promotional gift. While the gift is a nice bonus, make sure that you will benefit from the card programs before you apply for a credit card.

Use Your Student Credit Card Wisely

Once you have your student credit card, it is important that you use it wisely. There are some basic rules that you need to follow if you plan to avoid the debt trap that many students fall into. Here are some tips for the wise use of your credit card:

• Only purchase items that you already have the money for.
• Pay off your credit card balance each month.
• Plan purchases, and save up for large purchases. Then you can get the points by using your credit card, but pay off the card balance quickly to avoid interest charges.
• Use your credit card to build a credit history fast.

Credit cards come with a number of advantages. They are great financial tools that can help you prepare for the future. However, if you use them imprudently, you might find yourself trapped by debt. Don't let the purchasing power of your credit card go to your head, and make sure that you continue to behave in a financially responsible manner. Getting a student credit card should not be an excuse to ignore good financial sense.

This post was included in the Carnival of Wealth at Personal Dividends and in the Canadian Finance Carnival at Canadian Finance Blog.

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