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What to Do If You Can’t Get a Student Credit Card

By U.S. News & World Report

Student credit cards can be a good value — if you can get one. Due to the Credit Card Act of 2009, it can be hard for people younger than 21 to get a student credit card without a parent co-signer, and many issuers of student credit cards don’t allow co-signers. But there are alternatives for students starting out with credit: secured credit cards and authorized usership.

[See: 12 Simple Ways to Raise Your Credit Score.]

Small deposit may have big payoff. While not marketed to students, secured credit cards can be a great option for students with low or no credit scores. A secured card is a credit card backed by a cash deposit, while an unsecured credit card — the kind you most often see in ads — doesn’t require a deposit. Generally, the deposit will be equal to or less than the card’s credit limit. Most secured cards have credit limits from $200 to $500.

Secured cards aren’t as flashy as unsecured cards. Most don’t have rewards or sign-up bonuses, and many have annual fees. But they operate just like an unsecured credit card. Card activity is reported to the credit bureaus, and if you make all payments on time and keep the balance low in relation to the credit limit, your credit score should improve steadily.

It could be daunting to put up several hundred dollars as a secured card deposit, but that money isn’t gone forever. Once you’ve built your credit enough that you’re ready to graduate to an unsecured card with the same issuer, or close the account and look elsewhere for an unsecured card, you’ll get your deposit back. That assumes you’re in good standing. If you make all payments on time, you’ll be fine.

[See: 12 Habits to Help You Take Control of Your Credit.]

Buddy up for good credit. Another option: Become an authorized user on someone else’s card. Here’s how it works: The primary cardholder adds you to his or her card as an authorized user. You’ll get a card with your name on it that you can use, but you aren’t required to make payments. You also can’t make any changes to the account, such as increasing the credit limit or adding other authorized users.

While you aren’t legally obligated to pay off the charges you make as an authorized user, talk with the primary cardholder to set boundaries on the ways you’ll use the card. In other words, know if you can spend only a certain amount each month or whether you’re expected to make payments to the primary cardholder. Money can put a strain on your relationships, so set expectations first.

Also, make sure the issuer reports authorized users’ credit card activity to credit bureaus. Otherwise, your score won’t be affected.

[See: 10 Easy Ways to Pay Off Debt.]

Use credit cards wisely to build credit and avoid interest. It’s important to use credit cards well to build credit and avoid interest charges.

— Build credit. Focus on two primary things when trying to improve or build your credit: paying every bill on time and avoiding or paying off credit card debt to keep your credit utilization in check. Other factors can affect credit scores, but these have the highest impact in moving your score in the right direction. Set up automatic payments to avoid missing due dates and make a plan to pay off your balances.

— Avoid interest charges. Credit cards are useful tools, but only if you aren’t paying interest to use them. Credit cards tend to have double-digit interest rates, making them one of the most expensive kinds of debt. According to a new NerdWallet study, the average student accrues $569 in interest on credit card debt over four years of college by making only minimum payments. Limit spending to what you can afford to pay off each month so that you don’t get into credit card debt.

If you do get into debt, there are ways to minimize interest costs. Pay as much as you reasonably can above the minimum payment to pay off the credit card as quickly as possible. And make multiple payments each month. Interest accrues on the average daily balance, so anything you can do to lower the balance will help.

More from U.S. News

5 Ways to Give Your Credit Score a Quick Boost

What to Do If You’ve Fallen (Way) Behind on Your Credit Card Payments

10 Completely Careless Credit Card Mistakes You’re Making

What to Do If You Can’t Get a Student Credit Card originally appeared on usnews.com

Don’t Settle for Student Loans to Pay for Online Education

By WTOP Staff
Online college programs are becoming a more popular choice for prospective students, with one study finding that more than 6 million students enrolled in at least one online course in fall 2015. The popularity of these courses can be attributed in part to their flexibility with working adults' schedules, students' ability to progress more quickly through online programs and, oftentimes, cheaper tuition. [See 10 low-cost online bachelor's programs for out-of-state students.]Online degrees can be beneficial to many college students, but some studies have shown online learners complete their programs at lower rates than students at traditional brick-and-mortar campuses. Individuals with student loans but no degree comprise two-thirds of defaulted borrowers. Though these numbers are not encouraging, just like for traditional programs, there are ways to reduce how much you'll need to borrow for an online program to ensure you won't become one of these statistics. Don't just settle on borrowing student loans to cover the whole cost of your program and living expenses. Instead, start thinking about how to cut costs and cover your balance in different ways, such as the following. -- Grants and scholarships: Even though you are taking an online course, you can still apply and receive grants and scholarships. But your first step should be to complete the Free Application for Federal Student Aid, commonly referred to as the FAFSA, which will allow you to receive a Pell Grant if your expected family contribution is low enough. The EFC criteria and award amounts are adjusted annually, but the 2017-2018 academic year awards range from $606 to $5,920, which could significantly lower the amount you borrow annually. Your next step is to apply for scholarships. You can start by checking online scholarship search engines, such as the Salt Scholarship Search, College Board's BigFuture and Peterson's. But don't forget to take advantage of local organizations and your school's financial aid office. Both may offer scholarships that you can't find with a national scholarship search. [Review these 10 sites to kick off your scholarship search.]For instance, organizations like the Elks Club, Knights of Columbus or the Rotary Club typically offer scholarships annually to local students. Just because you're going to school online doesn't mean you're ineligible. Visit your local library for scholarship listings, and ask around town. You might be surprised how many local organizations offer scholarships. While these scholarships typically aren't large, every little bit counts. Each dollar you receive in a scholarship is a dollar you don't have to borrow and pay interest on. -- Work-study: Another option for online students may be work-study awards. Not all students enrolled in online programs are eligible, but students at some schools -- including, for example, SUNY Empire State College and Liberty University -- are. Work-study awards are not given upfront like scholarships and grants. In most cases, they are an offer to earn up to the awarded amount if you secure an eligible work-study job. While there is a misconception that all work-study jobs must be on campus, students can work for off-campus, nonprofit or public employers as long as the work is in the public's interest. You may be able to work for a for-profit employer if the job is relevant to your course of study. No matter who the outside employer is, it will need to have an established agreement with your college for you to receive work-study funds. Remember, to be eligible for federal financial aid, you must be enrolled and pursuing a degree or certificate. If you're not working toward a credential, Pell Grants and work-study won't be option, but you may still be able to take advantage of private scholarships -- just be sure to read the eligibility criteria carefully. [Explore what to know about financial aid in online programs.]-- Pay as you go: One of the great benefits to enrolling online is the flexible schedule, which can allow you to complete your college coursework around your responsibilities. But prospective students often overlook using their part- or full-time job earnings as an option for paying for college. Almost 80 percent of college students in 2015 worked at least part time while attending classes, according to the National Center for Education Statistics. By budgeting and thinking strategically about your college costs, you can likely reduce your dependence on student loans by paying a portion out of pocket. Many -- but not all -- online programs are less expensive than traditional programs and often have shorter payment periods. Six, eight or 10 weeks are common course durations. Because of the frequency of payments in an online setting, you may be well-placed to pay as you go and possibly avoid borrowing altogether. Attending college online and avoiding student loans may be challenging, but if you are willing to put in the effort, you can limit the amount you need to borrow. More from U.S. News Q&A: Understanding Student Loan Discharge Eligibility Student Loan Refinancing Isn't Right for All Borrowers
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