Credit Cards for Students With Bad Credit
By: Larry Goldberg
While most new college students are inundated with offer after offer from credit card companies, if you’re one of the millions of students who already have a poor credit history, you may be wondering if it’s still possible for you to get a part in the action. Credit cards are, after all, an essential part of our society. You can’t download new tunes for your MP3 player without a credit card. You can’t even order online from your college bookstore without a credit card. The great news is, though, that even if you have bad credit as a student, there are still credit cards out there that will fit your needs.
One of the first types of credit cards you can obtain if you have poor credit is called a secured credit card. With this type of card, you’ll be asked to deposit a certain amount of money into a savings account. That money then becomes your credit limit. In some cases, that money is a percentage of your credit limit. The money must be left in the account as long as it is open. Should you ever find yourself in a position where you can’t repay the company your balance or minimum monthly payment, the company can simply access your savings account to make the payment. Secured credit cards are a great way to begin rebuilding your positive credit history.
Another type of credit card you can get if you have bad credit as a student is a traditional unsecured credit card. Despite your poor credit rating, many companies will still be willing to take the risk and offer you a card. Bear in mind, though, your new credit card offer won’t be quite as good as it might if you had a better credit rating. Expect things like higher APR rates and lower credit limits. If you do well with this card, though, it is possible to change your higher APR and credit limit after a few years.
Your final option if you already have a poor credit rating is a prepaid student credit card. These kinds of cards work much like the debit card your bank would offer you. In this type of offer, you deposit money into an account. There is usually a fee for opening the account, and in many cases, there is also a fee for depositing funds in the account. The money you have placed in the account serves as your credit limit. With most companies, this type of card is universally accepted as a traditional credit card might be. The real drawback to this kind of card, though, is that many companies don’t report to the credit bureaus, which means that while you have all of the advantages of a credit card, you won’t actually be rebuilding your poor credit history.
If you’re one of the thousands of students with bad credit, there is still hope for credit card access. Examine your options carefully, then apply online for the credit card of your choice to start rebuilding your credit immediately.
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