For students, college campuses can be gateways to adulthood. Paying for tuition and books, living expenses and leisure requires students to make financial decisions, which might include acquiring and managing a credit card. While credit cards might seem like a viable option when living on a limited budget, there are requirements to consider, especially since many college students earn little or no income.
Before consumers under 21 years old can receive a credit card, a company must consider their ability to make minimum payments. Typically, consumers who have no means to pay a bill won't receive a card. The income requirement might seem unfair, but it was created to provide protection against aggressive credit card companies. Credit cards might help students defray the cost of their education, but access to credit without employment exposes them to risk, according to the U.S. Consumer Financial Protection Bureau.
College students would be indiscriminately affected by credit card income requirements that offered no flexibility. So, college students can still obtain credit cards, even as freshmen. Financial institutions sometimes send mail and email offers, and use other marketing strategies, to attract college students.
Student Credit Options
Seek employment if you wish to qualify for consumer credit while still a student. The fact that you are earning income is more important than the amount. Consider asking your parents or guardians to cosign your credit card application or to allow you to be an authorized user on one of their credit cards. You also can apply for a secured card or a prepaid debit card. Secured credit cards require a security deposit that is held by a bank in the event that you are unable to pay the debt. Prepaid debit cards require you to deposit cash on the cards to use them. Both credit card types use deposits as a built-in protection against overuse.
The Federal Trade Commission advises: "Before you sign on the dotted line, make sure you 'speak credit'." If you use a credit card for everyday living expenses while enrolled in college, understand your rights and responsibilities. Read the rules printed on the materials that come with your credit card. Being well versed about the card's fees and finance charges can help you avoid costly mistakes.
- University of Houston Law Center: Credit Card Companies Still Heavily Targeting College Students Despite Strict Regulations
- Federal Trade Commission: How to Be the Class ‘Value-dictorian’
- Sallie Mae: How America Pays for College 2012
- Consumer Financial Protection Bureau: Know Before You Owe: Credit Cards
- Edelman Intelligence: Experian College Graduate Survey Report
- MyFICO Blog: 5 Factors That Determine a FICO Score
- Federal Trade Commission: Accountability Responsibility and Disclosure Act of 2009
Kimetris N. Baltrip teaches journalism at Kansas State University. She has worked for "The New York Times" and "Houston Chronicle."