Unsecured Credit Cards for the Starving Student
A Credit Article Contributed by Cathy Wilson
Unsecured Credit Cards and the Single College Student
You're in college -- starving -- and you need yourself a nice credit card, preferably an unsecured credit card. Trouble is, you've got no credit history. . .AND you've got no money at the moment. What you need is a nice fresh little unsecured credit card . . .a friendly not-too-high credit line. . .and of course some way to pay the bugger back.
Unsecured Credit 101 for the Starving College Student
What exactly IS an unsecured credit card, anyway?
Well, if you've been a poor student for very long, you've probably tried applying for a credit card yourself. If you have really bad credit (like you've missed a car payment or run up bills on another card), you may be asked to put some of your own hard-earned money into an account before you can get a card; that is a secured credit card.
The Main Difference between Secured Credit Cards and Unsecured Credit Cards is Putting Money into the Secured Card.
It is a decent way to build credit. But an unsecured credit card is just a plain old credit card. Often it won't have a very high credit line on it, maybe as low as $500 available.
Why an Unsecured Credit Card If the Available Credit is So Low?
You do this so you can build good credit and here is how: you get this unsecured credit card and then YOU PAY OFF THE BALANCE EVERY MONTH.
Dang! It's easy! It's the easiest way in the world to build yourself some credit. After all, you don't want to dig yourself into a deep hole of debt. With your unsecured credit card, you can charge a few things, pay the bill in full every month, and build up good credit. THAT's why you want an unsecured credit card.
Unsecured Credit Cards in the long Run
What you are really after is the ability to pay your way without running yourself into the ground in debt. But you can use an unsecured credit card to help yourself through the thin times till you've got money. For example, it's the first of the semester and you've already used up your summer savings for tuition and part of your books. Just use your brand-spanking-new credit card to make up the difference -- get your books -- get a few supplies -- maybe a jacket or pair of Levis. THEN when your Pell grant comes in, pay that balance right off.
Unsecured Credit Cards As "Insurance"
And don't run up any more credit card bills until you are absolutely sure you can pay 'em off. Use that unsecured credit card for incidentals but only when you know your paycheck from your part-time job is coming next week.
Pitfalls of the Unsecured Credit Card
You've got to realize that college students are some of the worst for getting themselves into debt they can't repay. It's a nasty way of starting your adult career. Be smart. Think of your unsecured credit card as a tool to build good credit, not a tomorrow-will-never-come free-spending spree bonanza.
