Credit and Debit Card Ratings

Smart Moves for Students: How to Build Credit as a College Student

If you step back and think about it for a moment, college seems like a downright lousy time to start building good credit. For all too many students, the college years are a time to amass a mountain of student debt while not working. Building the solid credit history that allows you to get home and car loans at reasonable interest rates is something to put off until after graduation, right? Not necessarily. In fact, in the not too distant past, credit card companies tried to entice every student within a Frisbee’s throw of a college green to signup for entry-level cards by offering perks like free airline flights. While that practice was a way for lots of undergrads to demonstrate they were ready for the adult responsibility of repaying their debts – and hence establishing good credit – it also resulted in too many young people drowning in credit card debt. It was an unpopular enough marketing tactic that the Credit CARD Act of 2010 largely eliminated those campus credit card promotions. But the fact remains that it is better to get started building your credit sooner rather than later. And there are still ways to begin constructing the sort of stellar credit that lenders want to see while still in college. If you are asking the question about how to build credit as a college student, here are a few tried and true methods:

  • Obtain a secured card: Unlike standard credit cards, secured cards are easy to get because they require applicants to deposit money into their account before they spend a penny. That deposit amount becomes the card holder’s credit line, which makes it a risk-free proposition for the company offering the card – if you don’t pay your bill, they keep your deposit. But if you are smart and pay off all of your charges on-time it can be a great tool for burnishing your credit.
  • Open a gas or department store account: Like secured cards, department store or gas cards are a snap to get compared to traditional credit cards. And if you use it wisely – meaning you always pay your bills before they’re due – you’ll be sending a message that you reliably pay off your debts.
  • Get a credit card: True, the days of having multiple credit card offers stuffed in your campus mailbox are over. But if you have a part-time job and an existing relationship with a bank through a checking account and debit card, you just might be able to land a credit card. If you can swing it, do it. And this will sound like a broken record, but be sure to always pay your bill on-time and don’t get anywhere near your credit limit. Small, smart purchases that you pay off on a monthly basis will make a very good impression.
  • Hit up your parents: If you’re in college, your parents have clearly already done a lot for you. But if you think they’d be open to one more request, try to get them to add you as an authorized user of their credit card account. You won’t have complete control over the card, obviously, but it is a tool for building credit. If, that is, you use it wisely.

 

Author: Chris Warren

  • Smart Moves for Students: How to Build Credit as a College Student

    Smart Moves for Students: How to Build Credit as a College Student

    If you step back and think about it for a moment, college seems like a downright lousy time to start building good credit. For all too many students, the college years are a time to amass a mountain of student debt while not working. Building the solid credit history that allows you to get home and car loans at reasonable interest rates is something to put off until after graduation, right? Not necessarily. In fact, in the not too distant past, credit card companies tried to entice every student within a Frisbee’s throw of a college green to signup for entry-level cards by offering perks like free airline flights. While that practice was a way for lots of undergrads to demonstrate they were ready for the adult responsibility of repaying their debts – and hence establishing good credit – it also resulted in too many young people drowning in credit card debt. It was an unpopular enough marketing tactic that the Credit CARD Act of 2010 largely eliminated those campus credit card promotions. But the fact remains that it is better to get started building your credit sooner rather than later. And there are still ways to begin constructing the sort of stellar credit that lenders want to see while still in college. If you are asking the question about how to build credit as a college student, here are a few tried and true methods:

    • Obtain a secured card: Unlike standard credit cards, secured cards are easy to get because they require applicants to deposit money into their account before they spend a penny. That deposit amount becomes the card holder’s credit line, which makes it a risk-free proposition for the company offering the card – if you don’t pay your bill, they keep your deposit. But if you are smart and pay off all of your charges on-time it can be a great tool for burnishing your credit.
    • Open a gas or department store account: Like secured cards, department store or gas cards are a snap to get compared to traditional credit cards. And if you use it wisely – meaning you always pay your bills before they’re due – you’ll be sending a message that you reliably pay off your debts.
    • Get a credit card: True, the days of having multiple credit card offers stuffed in your campus mailbox are over. But if you have a part-time job and an existing relationship with a bank through a checking account and debit card, you just might be able to land a credit card. If you can swing it, do it. And this will sound like a broken record, but be sure to always pay your bill on-time and don’t get anywhere near your credit limit. Small, smart purchases that you pay off on a monthly basis will make a very good impression.
    • Hit up your parents: If you’re in college, your parents have clearly already done a lot for you. But if you think they’d be open to one more request, try to get them to add you as an authorized user of their credit card account. You won’t have complete control over the card, obviously, but it is a tool for building credit. If, that is, you use it wisely.

     

  • Insights Aplenty in Federal Reserve Payments Study

    Insights Aplenty in Federal Reserve Payments Study

    When most people think of the Federal Reserve – if they consider it at all – it’s when the Fed raises or lowers interest rates. But monetary policy is only one of the tasks the Fed engages in. It also conducts in-depth research in an effort to uncover trends and insights that can benefit consumers, industry and the economy as a whole.

    Recently, the Fed released the 2013 Federal Reserve Payments Study Detailed Report, which examines the use of credit, debit, prepaid debit cards and other forms of alternative payment. Although the information in the report was collected in 2012, it still provides an interesting glimpse into consumer and business use of various forms of plastic, checks and mobile devices.  Among the Federal Reserve Payment Study’s many findings are:

    • For purchases, Americans favor debit cards. On average, Americans made 23 monthly payments using a debit card, with credit cards utilized 11 times and prepaid cards close behind at 10 per month.
    • In total, Americans have 776 million general-purpose cards. Of that number, 334 million are credit cards, 283 million are debit cards and 159 million are prepaid cards.
    • At 305 million versus 28 million, consumers hold far more credit cards than do businesses.
    • ATMs were far more popular for getting cash than over the counter withdrawals. In total, there were 5.8 billion ATM withdrawals, compared to 2.1 billion over the counter.
    • Prepaid cards for public transport and other transportation payments exceeded all other prepaid card payments. In total, there were 9.9 billion payments using prepaid cards for auto tolls and public transport.
    • There were over 250 million mobile payments made utilizing mobile wallet applications.
    • PIN debit and ATM transactions had lower fraud rates than transactions using signature debit or credit cards.
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