Posts Tagged ‘Desire’

Student Credit Card – How To Choose The Right One

Getting a student credit card is not hard to do. The problem comes in how it is used. Your student should not be carrying large sums of cash each month to get through the month. It could easily be lost or stolen. I had a friend that was considered a genius. While we were at school he couldn’t remember from one day to the next what he had done the previous day, or where he put anything, including his money. Another friend constantly ran out of money by the middle of the month and was either borrowing form other students or on the phone crying to his father about needing more. Not to say I was a saint, but that is another story.

A student credit card may be the first line of credit your child has. It will depend on the child if they understand the responsibilities of having one. Student credit cards can come with a monthly limit or with no limit at all except for the bank limit. You have a choice in that matter, because usually the student will need a co-signer for that card.

In a credit based family a child may have signature loans by the time they are twelve. My uncle was one of those people. They used a well known institution for signature loans and he would take out six month to one year loans for music equipment that he was easily able to pay back in half the time. By the time he was sixteen his credit rating soared and to this day he has no problems with getting what he wants when he wants it.

Most of us are not that lucky however, and some students just are not driven by desire. A student credit card should not be a gift and should not be considered a gift by the parents. The students themselves should be mentally-aware of how to handle finances. If your child is one of those that still has a quarter when you give them the second one a week later, then chances are they can handle a credit card. If it was lost or spent, you may need to start worrying.

For the sake of the article we will assume that, while yet unproven, there is no indication that your student will use the credit card for junk. First sit down with the student and decide what the credit card will be used for. Keep in mind that a cola and pizza a day adds up to over 4475 plus tips, in credit over a year! The sum does not take into consideration other meals and snacks. A single candy bar at a school could easily add up to 365 pounds in credit over a year, if they only ate one a day. Try to remember your eating habits when you were a student.

Dormitory, apartment rent, books and tuition should be paid by check. If there is a car involved it should also be paid for by check, unless you and your student are familiar with online banking and the great benefits a good system offers.

If you are giving support to your student you can setup an auto withdrawal from your bank account each month to payoff the student credit card payments. The credit card can be great for just about anything but it, just like everything else, needs to be in moderation, and I mean moderation within your budget, not necessarily the students budget.

After you have decided on what the credit card will be used for go online and start searching. Make sure you pay attention to the all of the details of the card, and all of its terms and conditions. Above all, make sure there is an automatic bill payment feature so the card is never paid late.

If you are fed up with one of your credit cards or simply dont use it, then perhaps is the right time to cancel that card. However, cancelling a card can be tricky, as the company obviously wants you to stay with them. If you follow these simple steps then cancelling a card can be hassle free and will not affect your credit rating:

Pay it off

Obviously, the first thing you need to do before you can cancel a card is to pay off the balance. Although it can be hard to stop spending on the card, it is best to pay off the balance first. This will make it much easier to cancel and you wont incur any penalties when you do so. If you try to cancel the card whilst you still have a balance, the credit card company could put your interest rate up to the maximum whilst you pay the balance off.

Phone the credit company

After you have paid off the balance, the first step in cancelling your card is to notify the credit card company by phone of your desire to cancel. The number for your card issuer is usually located on your statement or the back of your card. When you call to cancel, expect the company to try and convince you otherwise.

Listen to their offer

When you cancel your card, the credit company might well offer you a new deal in order to keep you as a customer. They might offer you a lower interest rate or some other perks such as an upgrade to a platinum card. If the offer is good, then think about whether you should cancel. If you are trying to get rid of cards, then maybe you can get rid of another one. However, if the offer is not forthcoming then cancel your card without hesitation. If you have really set your mind to cancelling that card for whatever reason, then do so.

Write a letter

After you have cancelled your card, you should write to the credit card company and inform them that you want your credit report to show you cancelled the card voluntarily. If your credit report just shows you have had an account closed, other lenders might think the company closed it, and this will harm your credit score.

Check your report

Wait about a month after sending the letter, and then request a copy of your credit report. You want it to show that you cancelled the account. If the report says closed by creditor, then you need to do something about it because this will reflect badly on you. Call the credit card company again to let them know the mistake and follow up with another letter, along with a copy of the original letter. You need to do this because it is your responsibility to make sure your report is correct

When not to cancel

If you are trying to improve your credit score, then it might be a bad idea to close accounts. If you have unused credit this looks better than having used most of your credit. For example, if you have 5,000 used credit and 8,000 total credit, getting rid of one 2,000 card means you are using 5,000 out of 6,000 credit. This looks like you are more in debt than when you have free credit. However, if you know you need to close the account to avoid spending it, then cancelling a card is a good option.