Associate Student Credit Card

Some students are ineligible for unsecured credit cards based on a bad credit history or other financial issues. The best way for parents or independent students to get the credit cards they need even with bad credit is to apply for a secured credit card. There are advantages and disadvantages related to secured credit cards.

A secured credit card allows the student to have some purchasing power, but it may not help the student establish a good credit record. Generally, secured cards start with limits of about three hundred dollars and all or part of that amount must be deposited with the credit card company before purchases can be made. Like regular credit cards, secured card limits may be increased if payments are made on time, and interest may be earned on the deposit.

Associate Secured Credit Cards

Unlike prepaid credit cards, secured cards come with an interest rate, and it is often higher than those for unsecured cards. Students may find a program that offers a conversion option so that, if payments are made in a timely manner, the company may eventually offer the holder an unsecured card. Remember that, in order to get unsecured credit, the student must be working to establish a good credit record.

There are several key concerns related to secured credit cards. They do not help the student to build a good credit history unless the company reports on-time payments to credit bureaus. In addition, they can be expensive to start up with high application fees and annual fees as well as their higher interest rates. When considering a secured credit card, it is even more important to shop around since rates and fees differ greatly from company to company.