There are so many types of credit cards out on the market offering balance transfer, low APR, rewards, points, air miles, cash back and who knows what else. Credit cards targeting college students is another area targeted heavily through marketing.
These cards focused on the financially uneducated appear to be full of special perks when in reality they are no different in the way the function when compared to any other type of credit card.
The biggest difference in a college or student credit card comes not in function but in their use. The magic plastic finds itself in the hands of someone with no or little prior experience with credit and who perhaps does not understand how credit cards work.
Card companies’ start early with branding. Why? Credit card companies like VISA, Mastercard, Discover and their participating banks understand the customer loyalty! Loyalty to a credit card? Absolutely! For many students heading off to college validates them as an adult. The company, which first grants the incoming freshman the opportunity to carry a credit card proclaiming to the world they’ve reached adult status, gets their loyalty.
It is amazing to see both young men and women develop an attachment to their first credit card.
To attract these new potential customers companies spend mega bucks to get them signed up. To entice new card candidates credit card companies will offer a card design with their school colors and logo on it. They may offer premiums from bike locks to discount vouchers.
Selling students on their need and to experience the benefits of credit cards much earlier can quickly push a student into debt as they learn first hand about credit cards and their use.
To balance such risks, card suppliers often require a parent to co-sign the application form as a guarantee. Another way companies limit risk is with the interest rate or APR. The APR on student credit cards is generally higher than on other credit cards. Always understand the Terms and Conditions before applying for any card offer.