The college student's guide to credit cards - Part 3
Danielle Bly
Issue date: 11/20/09 Section: News
Consider credit card alternatives: If your credit card debt begins to spiral out of control, it could be time to cut up your credit cards and consider one of the alternatives to credit cards listed below.
Three alternatives to student credit cards:
Credit cards aren't the only convenient and widely-accepted payment methods available. Financial institutions have developed some unique alternatives that feature many of the same benefits that credit cards offer. These alternatives can help to eliminate some of the dangers posed by credit cards.
Bank debit card: A bank debit card or ATM card is tied to your checking account. When the card is used, the amount spent is automatically deducted from your checking account. This type of card does not build credit history, but it eliminates the possibility of overspending because you can never spend more than what's in your checking account. Generally, most bank debit cards use Visa or Mastercard, so you can use them practically anywhere.
Charge card: Charge cards are different from credit cards because they must be paid in full every month. Most American Express cards are considered charge cards for this reason. These cards allow you to build credit history while making sure you do not overspend.
Prepaid credit cards: Prepaid cards allow you to put a set amount of money on this card, and you cannot spend any more than what is programmed. This eliminates the risk of overspending. These cards can also be used anywhere credit cards are accepted.
Final thoughts on student credit cards:
While credit cards offer convenience, security, and financial rewards, they also come with potential risk. It's critical for students to understand the many benefits and pitfalls of credit cards before opening an account. When you do decide to get a credit card, manage your money effectively to avoid any potential problems. This will help you build your credit history and earn points while doing it! Always remember the number one rule of financial management - Don't spend money that you don't have. Stick to this golden rule, and credit cards will benefit you for years to come.
Three alternatives to student credit cards:
Credit cards aren't the only convenient and widely-accepted payment methods available. Financial institutions have developed some unique alternatives that feature many of the same benefits that credit cards offer. These alternatives can help to eliminate some of the dangers posed by credit cards.
Bank debit card: A bank debit card or ATM card is tied to your checking account. When the card is used, the amount spent is automatically deducted from your checking account. This type of card does not build credit history, but it eliminates the possibility of overspending because you can never spend more than what's in your checking account. Generally, most bank debit cards use Visa or Mastercard, so you can use them practically anywhere.
Charge card: Charge cards are different from credit cards because they must be paid in full every month. Most American Express cards are considered charge cards for this reason. These cards allow you to build credit history while making sure you do not overspend.
Prepaid credit cards: Prepaid cards allow you to put a set amount of money on this card, and you cannot spend any more than what is programmed. This eliminates the risk of overspending. These cards can also be used anywhere credit cards are accepted.
Final thoughts on student credit cards:
While credit cards offer convenience, security, and financial rewards, they also come with potential risk. It's critical for students to understand the many benefits and pitfalls of credit cards before opening an account. When you do decide to get a credit card, manage your money effectively to avoid any potential problems. This will help you build your credit history and earn points while doing it! Always remember the number one rule of financial management - Don't spend money that you don't have. Stick to this golden rule, and credit cards will benefit you for years to come.
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