Which Is Best - Student Credit Card Or Debit Card?

There are two types of cards that students can choose to help them with their schooling- prepaid debit cards and student credit cards. Which of these two cards should you choose? What are their differences and how should they affect your choice? Understanding the basic points about these two credit card options can help you come up with an informed decision. Here’s what you should know.

The Unsecured Student Credit Card

An unsecured student credit card works like any regular credit card. The student is given a credit line which means he can charge expenses on his card as long as he doesn’t exceed this limit. Most student credit cards give a $500 credit limit while others give as much as $1,000 credit line. Since this their first time applying for a credit card, the credit limit given to students are often lower than those allotted to long time credit card holders.

Nevertheless, getting a student credit card is a good way to start building your own credit history while still in school. In fact, being in a college is the only time you can apply for an unsecured credit card without difficulty. Once you’ve graduate, lenders and credit card companies would often require a good credit history to approve your application.

Although not all student credit cards give a low credit limit, this restriction can work to your advantage. By sticking with a low credit line, you also avoid the risk of incurring very large debts on your account. Remember, as a credit card holder, you should do your best not to exceed beyond 50% of your allotted credit.

The Student Prepaid Debit Card

Now let’s talk about the student prepaid debit card. It may look like a credit card and it can actually be used to pay for your purchases just like a credit card but it is different in some ways. How? Instead of a line of credit, you’ll need to deposit money in your account first in order to use the card. If you don’t have existing funds in your debit account, you won’t be able to use the card for payments.

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Related Resources:

• Secured Credit Cards
• Prepaid Services