How to make the best use of student credit cards?

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They say a broken heart and an empty pocket is an average Indian student's best friend. They never leave their side. While the solution to the former is yet to be invented, the latter has been taken care of. Thanks to the ever-evolving financial world we live in, being broke is now a choice. Major banks in the country have introduced credit cards for students to make life easier for youngsters. The other intention behind this move was to provide students with a certain amount of financial freedom.

How to make the best use of student credit cards?

Student credit cards not only help you to tackle unexpected expenses but also take care of those spur-of-the-moment purchases (read the latest PS4 game or a shiny pair of shoes for the best friend's birthday party). It is a known fact that the needs of a student are different from those of a working professional. Banks in India acknowledge this and design their students' credit cards accordingly.

Listed below are some of the features that a student's credit card has:

  • Low credit limit: Credit cards that are meant for students have a lesser credit limit. Banks in India mostly set the credit limit of such cards at around Rs.15,000.
  • The validity of the credit card: Generally, the validity of a student credit card is 5 years from the date of its issuance.
  • Waived joining fee: While students' credit cards mostly come without a joining fee, the annual fees on them is also lower than usual. This helps them in maintaining the credit card easily.
  • Free of cost issuance of duplicate card: A duplicate card is issued without any charges if the cardholder loses or misplaces their card.
  • Customized rewards and deals: Credit cards that are meant for students come loaded with loyalty programs and reward points. The cardholders can use them to earn cashback or bag attractive gifts from the bank's catalogue. That's not all! These cards also offer special discounts and offers to students on making purchases or availing services across the globe.

So, now that you know a student's credit card comes with such amazing features, you might be thinking of trying one. But getting a student's' credit card and not knowing how to use it is as good as not having one. So, here are a few ideas that will help you know how to make the best use of students' credit card:

  • Use it to build a good credit history: Since it is your first credit card, you can use it to start building a good credit history. A good credit score will help you get your loans approved easily in future. It is a healthy practice to keep checking your credit score online every now and then. This will keep giving you an idea about your creditworthiness. 
  • Use it to keep a track of your expenditure: Students' credit cards also come with a monthly statement that has all the credit as well as debit expenses made towards the card. This will help you keep an account of your expenditure. Since this statement is mailed to you, you can get a detailed breakdown of your expenditure in the comfort of your home. You can ask your bank to provide you with daily as well as weekly credit card statements also. 
  • Use it to pay your bills on time: You can link your phone, electricity, and other such monthly bills to your credit card and set a date. Your bills will be deducted automatically from your credit card account on the date you set. This will save you from paying a late payment fine. Some telephone networks give you a small discount on your bill if you pay it using your student's' credit card. 
  • Use it at retail shops wisely to earn reward points: You can purchase your monthly grocery using your student's' credit card to earn reward points. When gathered and redeemed, these points will give you access to exclusive offers and discounts. But don't get too excited while collecting reward points otherwise you will end up paying more than you can afford in the process. 
  • Use the grace period on purchases mindfully: A lot of retail stores offer a grace period for students when they buy products using a student's' credit card. This means that you can avoid paying a huge interest for such purchases if you pay your credit card balance in full every month. If you default payment and start having revolving credit, you might lose this grace period. 
  • Use it credit limit wisely: First of all, use a card with a low credit limit. Next, make sure that you never overshoot it. Make it a point to keep your credit card balance below 35% of your credit limit. We agree that is a difficult thing to do but think of it this way - even if you aren't paying for the things you bought now, you will have to pay for them later. 

Using a student's' credit card responsibly will help you not only plan your expenses better but it will also give you the kind of financial freedom that you yearn for. By building and maintaining a positive and healthy credit history, you will have the banks offering attractive loans to you that you can use in future. It will also increase your chances of getting a loan approved more easily in the future. So, if you are getting a student's' credit card, make sure that you know how to make the best use of it.

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