There has always been a high demand for credit card for students with no job. Credit cards are becoming increasingly important in today’s world.
To approve your credit card request, most financial institutions or banks require proof of employment. As a result, many college students find it difficult to obtain a credit card. It is, fortunately, not completely impossible.
College students are eligible to apply for a credit card. However, to qualify, they must have a trust fund, an investment, or some financial assets.
Generally, credit cards allow you to spend more freely, help you clear debt more quickly, build your credit profile, and earn rewards. Some cards are even specifically designed for students.
Some banks may be willing to issue you a credit card if you already have an account with them and sufficient funds. It is best to compare student credit card offers from various banks and then select the one that appears to be more suitable for you.
Benefits of Credit Card for Students with no Job
There are several reasons why you might want to get a student credit card. These are some examples:
Purchase protection: A student credit card provides the same level of purchase protection as standard credit cards.
Section 75 of the Consumer Credit Act protects you if you purchase goods worth between £100 and £30,000 and they fail to arrive as described, or the company goes bankrupt.
Interest-free period: Some companies offer a limited time interest-free period for purchases – typically a few months – giving you time to pay off the balance.
However, make sure you know when this period ends so you can pay off the outstanding balance; otherwise, interest charges will accumulate.
Improve your credit score: Ability to manage your student credit card repayments can help you improve your credit score, especially if you’ve never used credit before and have a limited borrowing history. In the future, this may make it easier to obtain credit cards, loans, and even a mortgage.
Rewards: Some providers offer cashback, loyalty points, or discounted railcards when you spend. You can make a student credit card work financially for you if you use it wisely.
There is no annual fee: Annual fees are typically not charged on student credit cards.
Higher approval rate: While studying, you may find that obtaining a student credit card is easier than obtaining a standard credit card. This however happens if you use the credit card responsibly.
Possible Risks of Student Credit Card
When applying for a student credit card, you should be aware of the following risks:
Rejected applications can have an impact on your credit score: If you do not meet the lender’s borrowing criteria for a student credit card, your credit score may suffer.
High interest rates: Because these cards have higher interest rates than standard credit cards, you will end up paying more if you do not pay off your balance each month.
Fees: If you use your student credit card to withdraw cash, if you make a late payment, if you go over your credit limit, or if you use your card abroad, you will almost certainly be charged a fee.
Lower credit limits: While a lower credit limit can help you avoid overspending, it also limits the amount you can borrow.
Can I get a Student Credit Card with a Bad Credit Score?
With a negative credit score, you might be able to get a student credit card, but you’ll probably get a lesser credit limit and higher interest rates if you’re accepted.
When issuing a credit card, credit card companies use your credit score, which helps them determine how much credit you are eligible for.
The great news is that you can improve your credit score, which may help you obtain a student credit card. These tasks include registering to vote, closing unneeded credit accounts, and reviewing and correcting your current credit rating. Visit our credit score improvement guide for more information.
Also Read: The Best Credit Card for Student Loans Payment
Should I pay off my Credit Card Debt with my Student Loan?
Credit cards have a higher interest rate than student loans since they are more immediate debt. If you don’t have any other options, utilizing a portion of your student loan to pay off your credit card debt can make sense.
However, if you find yourself in this circumstance, you should evaluate your financial condition. While you are studying, your student loan is likely to help you pay for housing and other necessities. If you use it to pay off your credit card, you can find yourself short on cash in other areas.
When I Graduate, What happens to my Student Credit Card?
After you graduate, you can still use your student credit card.
However, if you’ve been good with your student credit card, you might be able to receive a credit card with a lower interest rate, 0% interest on purchases or debt transfers, cashback, or perks.
Once you have steady work, you’ll have access to a far larger selection of credit cards.
What other options do you have besides a Student Credit Card?
A current account with an overdraft is an alternative to a student credit card. Most student checking accounts provide 0% interest and no overdraft fees. The amount of money you can borrow on your overdraft is determined by how far along you are in your studies (what academic year you are in), as well as your personal and financial circumstances.
Here are Some Options for Getting a Credit Card if you don’t have a Job:
Showing proof of income
The job is less significant than the income. You are equally qualified to apply for a credit card if you do not have a job but have a significant inflow of money into your account. With your credit card request, you must present proof of income to the bank.
Royalties, company profits, child support, and alimony could all be sources of income. Some banks may request copies of your tax returns.
With the Help of a Co-signer
A co-signer is essentially a creditworthy guarantor. When you get a credit card with a co-signer, he or she becomes equally accountable for payments as you. In the event of a payment default, the co-credit signer’s score is also impacted.
Banks usually only consider guardians or parents to be co-signers. Some banks, however, may accept a co-signer who is not related to you.
Applying for a Secured Credit Card
You can get a secured credit card even if you don’t have a job or are self-employed. You must have the funds available for this. The fund serves as collateral for the credit line. This amount serves as your credit card’s security deposit.
In the event that the balance payment is not made, the amount will be deducted from the security deposit.
Conclusion
In this article, we have highlighted the easiest way to secure credit card for students with no job. Credit cards can provide students with a variety of benefits, including spending flexibility, budgeting assistance, and the development of a credit history – all of which will be useful later in life, including when applying for a mortgage.
They can be valuable asset when used wisely, and you can even use them to your advantage by gaining cashback and loyalty points.
Credit cards, however, come with risks: your debt may begin to grow, and interest charges may be high if you do not pay off what you end up owing.
Also Read: Top USA Universities Offering 100% Scholarship To International Students
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