A Student Credit Card is a special credit card that can be availed by students at the college level. It allows students, above the age of 18 years, to manage their own expenses when they do not have a credit history in place. The eligibility criteria for such credit cards varies according to the guidelines of the institution offering the card. The interest rate on such credit card is significantly low, and the validity usually extends to a period of 5 years.
So what's the difference between a student credit card and a regular credit card? A Student Credit Card is quite different from a regular Credit Card you get from a financial institution. It does not have an income eligibility limit and has separate guidelines for eligibility as the card is specially designed for students. Unlike regular Credit Cards, the documentation required to apply for credit card is also bare minimum. It also does not give you access to a higher credit limit and other standout features that are offered by regular Credit Cards.
Apart from Student Credit Cards and regular Credit Cards, there is also another type of card called the Secure Credit Card.
A Secured Credit Card is an alternative to the traditional Credit Card and can be availed by people who have a bad credit score and are looking to replenish their score. In short, Secured Credit Cards are special Credit Cards that are offered against a fixed deposit. By making timely payments on the Secured Credit Card, cardholders can rebuild their credit histories and score over a period of time. However, in case of delay or default in making payments, the dues are recovered from the fixed deposit. The card requires minimal documentation as the FD acts as a security deposit.
Most Secured Credit Cards are MasterCard or Visa cards, and work exactly like typical Credit Cards. However, unlike regular Credit Cards, Secure Credit Cards involve a cash collateral deposit that serves as the credit line for the specific account. As a result, in case of default of payments, the fixed deposit can be liquidated by the bank to recover the debts. Also, while applying for the card, the issuer decides the credit limit you can afford and accordingly charges the fixed deposit, which cannot be closed till the Secured Credit Card is in possession of the cardholder. Usually, unlike regular Credit Cards, the credit limit offered on such cards is 75% to 85% of the fixed deposit amount.
A Secured Credit Card can be availed by individuals who are currently not employed, and have a low CIBIL score. People who work in a 'blacklisted' company or live in a 'blacklisted neighbourhood' (according to the bank), or have a monthly income lower than the prescribed amount set by the bank to apply for a regular Credit Card, can opt for a Secured Credit Card. On the other hand, a Student Credit Card is designed only for students who are pursuing their higher education and are looking to manage their own expenses.
The student credit card advantages are as follows-
There are several advantages of using Secured Credit Cards. Some of the benefits are as follows —
A student credit card is meant only for students looking to pursue higher education and do not have an eligible credit history. A regular credit card, on the other hand, is for people who have a good credit score and are looking to purchase big-ticket items on credit.
By making timely payments against the secured credit card, one can over a stipulated amount of time, say 1 or 2 years, improve their credit score enough for the bank or the issuer to delink the card from your FD.