As a student, having a go-to access to a reliable financial tool becomes important when you are in college. There can be many important expenses like study material, accommodation fees, travel, buying things related to academics, etc. This is where you can use a Student Credit Card and pay for all important expenses with ease. In this blog, we will discuss how a Student Credit Card works, its benefits, interest rates levied, and how to choose the right type of card.
Meaning of a Student Credit Card
Student Credit Cards are designed especially for students who are in college and just starting their financial journey. The card can be used to access money instantly while also learning how to use the card more responsibly.
Some important things to know about the card are that it usually comes with lower credit limits, lower fees, and more manageable terms compared to regular or premium Credit Cards. Student Credit Cards are best when you are looking to build a good credit history early in the long run.
Eligibility for a Student Credit Card
Here are some important eligibility conditions when you are looking to apply for Student Credit Card:
- You must be at least 18 years of age.
- You must be an Indian citizen.
- You must show proof that you are a student, like a college ID.
Reasons to Apply for a Student Credit Card
- Building Credit Score
An important benefit of getting a Student Credit Card is the chance that you get to build a credit history early in life. When it comes to your financial future, credit scores play a big role as they help in getting favourable loans, as banks ask for credit scores when approving loans.
- Learning Financial Responsibility
Having this card can also help you get accustomed to managing your finances. As a student, you can start learning the concept of budgeting early, and pay bills on time in order to avoid debt in the long run. The card lets you start small and eventually learn to use credit wisely without the risk of falling into debt.
- Cashback and Rewards
With these Credit Cards, you can get rewards like cashback on your purchases. You can use this feature to your benefit and save money while making everyday purchases such as books, groceries, and more.
- Emergency Financial Support
Such a Credit Card can provide you with an extra safety net in case of unexpected expenses. Whether it’s an urgent medical bill or a last-minute textbook purchase, having access to fast funds can provide peace of mind and security.
- Student-Specific Discounts and Perks
Today, most banks offer Student Credit Cards that come with added perks like discounts on OTT streaming services, food delivery, and even retail purchases. You can take advantage of these perks, tailored to student lifestyles.
- Low or No Annual Fees
Student Credit Cards offer no annual fee or have a minimal fee. This comes as a major advantage because students often have tight budgets and they can get help with these cards, offering low or no annual or joining fees.
- Access to Tools for Tracking Spending
Today, most of the Student Credit Cards come with access to mobile apps or Net Banking that allow you to track your spending. These tools are excellent for budgeting and ensuring that you don’t exceed your financial limits.
Interest Rates on a Student Credit Card
Student Credit Cards need you to pay an interest rate when you are unable to pay the bill as per the billing cycle, or take out cash using the card, or convert the bill into EMIs. If the full outstanding balance is not cleared by the due date, interest is charged on all new transactions as well as the pending dues.
For many student cards, this charge can go up to 3.75% per month, which adds significantly to the total repayment. That’s why it’s important for students to pay bills on time and avoid carrying forward balances.
Tips to Choose the Preferred Student Credit Card
- Look for Low Fees and Interest Rates
The preferred Student Credit Cards will have low or no annual fees and lower-than-average interest rates. Since students are often on tight budgets, this will help avoid unnecessary financial strain.
- Check for Rewards Programs
Opt for a card that offers rewards or cashback. You may find cards that give you cashback on categories like groceries, dining, or entertainment. These rewards can be redeemed for cash or used to reduce your balance, giving you added benefits as you manage your spending.
- Consider Your Credit Score
While many Student Credit Cards are designed for those with limited or no credit history, some may require a certain minimum credit score. Check the eligibility criteria before applying to make sure you’re a good fit for the card.
- Review Terms and Conditions
Always read the terms and conditions before applying for a Credit Card. Look out for potential fees such as late payment fees, foreign transaction fees, and over-limit fees. Always refer to the Key Fact Statement, which details the repayment schedule and terms & conditions. Understanding the card’s terms and conditions will ensure there are no surprises later.
- Look for Perks and Discounts as Per Your Needs
Some Student Credit Cards offer exclusive perks such as discounts on Amazon, Apple Music, Spotify, or even study-related tools and services. These perks can save you money and improve your overall student experience.
Conclusion
Student Credit Cards are a smart financial tool designed to help young adults start their credit journey responsibly. With lower credit limits, simplified eligibility, and exclusive benefits, they make it easier for students to learn money management while enjoying rewards on everyday spending. Although interest rates apply if payments are delayed, timely repayments build a strong credit score that benefits future financial needs like loans or premium Credit Cards.
