Student Credit Card Or Prepaid Debit Which One Is Best

Student Credit Card Or Prepaid Debit Which One Is Best



Student credit cards come in​ a​ variety of​ forms .​
But,​ there are two primary forms in​ which a​ student credit card can be found .​
the​ first is​ an​ unsecured student credit card while the​ other is​ a​ prepaid debit card .​
Understanding the​ differences and the​ pros and cons of​ each will help you​ to​ better determine which is​ best for you.

The Unsecured Student Credit Card
An unsecured student credit card is​ like a​ traditional credit card .​
With this type of​ student credit card,​ the​ college student (or high school student,​ as​ the​ case may be) receives a​ line of​ credit .​

Typically,​ student credit cards keep low lines of​ credit of​ about $500 to​ $1,​000 .​
This is​ partly because those applying for student credit cards typically have very little credit history and do not qualify for higher credit limits .​
the​ lower limit is​ also in​ place in​ order to​ help prevent the​ college student from accruing an​ insurmountable debt .​

Not all credit cards for college students have such a​ low credit limit .​
So,​ if​ you​ require a​ student credit card with a​ larger limit,​ you​ might want to​ shop around .​
Similarly,​ if​ you​ want the​ restriction of​ a​ small credit limit in​ order to​ keep yourself under control when it​ comes to​ spending,​ be sure to​ seek a​ student credit card with a​ low credit limit.

The Student Prepaid Debit Card
A student prepaid debit card is​ a​ card that looks like a​ credit card and is​ accepted everywhere a​ credit card is​ accepted,​ but has one major difference: a​ line of​ credit is​ not extended to​ the​ cardholder .​
in​ order to​ make purchases with a​ student prepaid debit card,​ money needs to​ be placed on​ the​ card first .​
This money can come from a​ variety of​ sources .​
the​ student can place the​ funds on​ the​ card him or​ herself .​
Or,​ the​ student's parents can choose to​ add money to​ the​ card .​
in​ fact,​ parents can generally set it​ up so a​ portion of​ their checks from work is​ added to​ the​ debit card each pay period.

Pros and Cons of​ Student Credit Cards
Student credit cards can go a​ long way in​ helping to​ establish a​ student's credit history .​
in​ addition,​ a​ student who does not have money to​ pay up front can certainly benefit from being able to​ take out small loans with the​ credit card in​ order to​ make purchases .​

Another perk is​ the​ fact that the​ student doesn't have to​ wait for money to​ be added to​ the​ card before using it .​
So long as​ there is​ credit available on​ the​ card,​ the​ student can spend as​ much as​ he or​ she wants .​

On the​ other hand,​ a​ student credit card increases the​ chances of​ creating a​ poor credit history .​
If the​ student accumulates a​ debt he or​ she is​ unable to​ pay,​ or​ if​ the​ student is​ late making monthly payments,​ it​ can reflect poorly on​ the​ credit reports .​

In​ addition,​ many students are already starting their adult lives in​ debt as​ they pay off college loans .​
Adding more debt from a​ credit card can be overwhelming and seem impossible to​ overcome.

Pros and Cons of​ a​ Student Prepaid Debit Card
A student prepaid debit card makes it​ easier for a​ student's parents to​ keep track of​ college expenses and to​ monitor the​ student's spending .​

in​ addition,​ there is​ no risk of​ destroying a​ credit history that has yet to​ be created because the​ student cannot spend more than what is​ placed on​ the​ student prepaid credit card .​

Many of​ these cards also report to​ credit bureaus,​ which helps in​ building a​ positive credit history.
Unfortunately,​ prepaid credit cards generally have many more fees than credit cards for college students .​

In​ fact,​ there usually are no fees associated with credit cards .​
Debit cards,​ on​ the​ other hand,​ often have an​ application fee and an​ annual fee .​
There are also fees added every time more money is​ placed on​ the​ card .​
All of​ these fees can easily add up to​ hundreds of​ dollars each year .​

When it​ comes to​ choosing which is​ right for you,​ it​ is​ really necessary to​ evaluate your own needs and spending habits.




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