Monday, 12 March 2012

College Student Credit Cards With No Credit History

The first thing thing students need to do when applying for this special card is to go to a bank and find out what their options are. One type of no-credit credit card is the prepaid card that can be created by putting up an extra account with the bank to serve as collateral.

No credit account cards are the ideal cards for people who have no credit history like college students or for people who have not maintained good standing. Cards of this kind can help someone start building a credit history or repair a tainted one. Someone with no financial history could face difficulties in getting a loan. A good history can be built starting with a card that has no credit. For someone whose rating has been impaired, this card is the perfect start towards fixing it.

A minimum balance has to be maintained in the extra account that is used as collateral to guarantee payments for the card are kept at a constant. For instance, if you deposit $1,000 into an extra savings account, this means your credit limit is $1,000. You will be using the prepaid credit card just like a standard credit card, but if you are remiss on your payments the amount will be taken from the extra account.

This sort of card is called a secured credit card. There are lots of financial organizations that give no credit account cards. You can apply for these online or personally through credit unions.

Find out if your card issuer reports to all three major credit bureaus. Unless your use of the card and the payments you make are not being reported, you will have no record and you cannot create a credit history or rebuild one. In applying for a card, you may have to pay a fee. Proof of your income could also be required in the form of bill payments or pay stubs.

Young people like college students could find it more difficult to acquire their own much sought-after plastic. A nonexistent credit history is the reason for this, not poor credit. Someone who has no credit history is practically in the same boat as someone with bad credit. Fortunately, there are methods that can be employed to start building a credit history.

A student could get his or her parents to co-sign for a loan. A lending firm's decision whether to approve a student's loan or not will hinge on the co-signer's credit. With a parent who has good credit history as co-signer, a student is more likely to be granted more manageable interest rates.

Another good option is a card you can get from a department or grocery store, or even from a gas station. These outlets usually have less stringent requirements for credit. A card like this is perfect for use of consumers who make frequent purchases at the outlets they got credit from; since it is unlikely they will go on a buying spree because this card can only pay for necessities.

Once you get credit and are in a position to build your credit history, you have to be responsible enough to make prompt payments each month. By building a good credit history, you can have an easier time getting a loan or getting another orm of card in the future.

No credit credit cards are like a second chance granted to people who seemingly have little or no chance of getting credit considering their bad credit history. If you were not the ideal cardholder in the past, get rid of your bad habits and repair your credit history. If you are just starting to build a credit history, do the responsible thing by paying your credit-card bills on time.

People with bad credit history and most students have a tough time getting a credit card, but a prepaid credit card sure is a great help, and as a parent you can help your student a lot more by getting him, or her, their own student credit card.

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