Student Credit Card or Prepaid Debit - Which One is Best?

Student credit cards come in a variety of forms. But,Pros and Cons of Student Credit Cards
there are two primary forms in which a student creditStudent credit cards can go a long way in helping to
card can be found. The first is an unsecured studentestablish a student's credit history. In addition, a student
credit card while the other is a prepaid debit card.who does not have money to pay up front can
Understanding the differences and the pros and conscertainly benefit from being able to take out small loans
of each will help you to better determine which is bestwith the credit card in order to make purchases.
for you.Another perk is the fact that the student doesn't have
The Unsecured Student Credit Cardto wait for money to be added to the card before
An unsecured student credit card is like a traditionalusing it. So long as there is credit available on the card,
credit card. With this type of student credit card, thethe student can spend as much as he or she wants.
college student (or high school student, as the caseOn the other hand, a student credit card increases the
may be) receives a line of credit. Typically, studentchances of creating a poor credit history. If the student
credit cards keep low lines of credit of about $500 toaccumulates a debt he or she is unable to pay, or if
$1,000. This is partly because those applying forthe student is late making monthly payments, it can
student credit cards typically have very little creditreflect poorly on the credit reports. In addition, many
history and do not qualify for higher credit limits. Thestudents are already starting their adult lives in debt as
lower limit is also in place in order to help prevent thethey pay off college loans. Adding more debt from a
college student from accruing an insurmountable debt.credit card can be overwhelming and seem impossible
Not all credit cards for college students have such ato overcome.
low credit limit. So, if you require a student credit cardPros and Cons of a Student Prepaid Debit Card
with a larger limit, you might want to shop around.A student prepaid debit card makes it easier for a
Similarly, if you want the restriction of a small credit limitstudent's parents to keep track of college expenses
in order to keep yourself under control when it comesand to monitor the student's spending. In addition, there
to spending, be sure to seek a student credit card withis no risk of destroying a credit history that has yet to
a low credit limit.be created because the student cannot spend more
The Student Prepaid Debit Cardthan what is placed on the student prepaid credit card.
A student prepaid debit card is a card that looks like aMany of these cards also report to credit bureaus,
credit card and is accepted everywhere a credit cardwhich helps in building a positive credit history.
is accepted, but has one major difference: a line ofUnfortunately, prepaid credit cards generally have
credit is not extended to the cardholder. In order tomany more fees than credit cards for college
make purchases with a student prepaid debit card,students. In fact, there usually are no fees associated
money needs to be placed on the card first. Thiswith credit cards. Debit cards, on the other hand, often
money can come from a variety of sources. Thehave an application fee and an annual fee. There are
student can place the funds on the card him or herself.also fees added every time more money is placed on
Or, the student's parents can choose to add money tothe card. All of these fees can easily add up to
the card. In fact, parents can generally set it up so ahundreds of dollars each year. When it comes to
portion of their checks from work is added to the debitchoosing which is right for you, it is really necessary to
card each pay period.evaluate your own needs and spending habits.