A student credit card is a type of credit card that is intended and specifically marketed to college and university students, as well as high school seniors.
Most student credit cards do not require any sort of deposit or security from the issuer. If accepted, the issuer offers a line of credit up to a specified limit. It is important to note that many student credit cards are designed to assist students with establishing credit, but it is still possible to find one that offers rewards to the cardholder.
Revenues from student credit card issuers are profitable due to high-interest rates on unpaid balances and late payment fees. Student credit cards are often offered through universities, either as part of a university-affiliated target marketing program or as an independent business.
The primary benefit of a student credit card is that it enables students to establish or build their credit histories for the first time, which can help them later with qualifying for loans and other types of financial assistance. Issuers may offer college-specific rewards programs to assist student cardholders in establishing good spending habits during school. Additionally, it is a common practice on college campuses to accept payments via credit card for items such as tuition and books.
Student credit cards are often used in conjunction with student loans or other types of financial assistance that require repayment. Issuers usually expect payment in full within 30 to 45 days after funds are disbursed by the lending institution. Delinquency can have a negative impact on the ability to obtain future credit.
Student credit cards are usually not designed with rewards for students. Rewards programs are often offered through affiliated universities or by national businesses in conjunction with their cardholders’ student credit cards. Most of these types of student credit cards receive marketing support from their associated universities, which can be used to direct students to use their student credit cards for purchases on and around the universities’ campuses.
University-affiliated marketing programs do not usually offer sign-up bonuses upon approval and generally limit offers of rewards and incentives to students at their associated institutions.