Credit cards can benefit students who are just beginning to navigate personal finance. While they may not have immediate cash on hand, students often need funds for expenses related to their studies.
However, obtaining a student credit card can be challenging due to low income and lack of credit history.
Financial institutions are typically hesitant to issue credit cards to students, who often have less stable monthly incomes and limited credit histories.
In contrast, individuals with a steady income and a good credit score can acquire credit cards more quickly.
Students must understand the benefits and limitations of credit cards before applying for one.
Benefits of a Student Credit Card:
- A student credit card typically validates up to five years.
- In case of loss or theft, it can be replaced free of charge or for a minimal fee.
- Many student credit cards have no annual fee, promoting savings.
- The application process involves less paperwork than that of regular credit cards.
- Responsible use of a student credit card can help improve the student’s credit score.
Limitations of a Student Credit Card:
- Student credit cards generally come with a low spending limit.
- They often have higher interest rates compared to regular credit cards.
- Some student credit cards may require a small annual fee.
- Late payment fees can be steep, and some cards may have hidden charges.
Who Can Apply for a Student Credit Card?
- Students who are at least 18 years old.
- Individuals currently enrolled in a college or university.
Documents Required to Apply for a Student Credit Card:
- Personal identity proof includes a PAN card, voter ID, or Aadhaar card.
- Address proof, which could be an Aadhaar card or government-approved document.
- A birth certificate or a passport-sized photograph.
- A student ID card issued by the college or university.
Applicants must submit photocopies of these identity documents and the student credit card application form.