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How Does Obtaining A Student Credit Card With Cosigner Work

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Having a student credit card comes with a variety of benefits, making it possible to pay your food and gas bills, furniture, textbooks, etc. College students benefit from holding a credit card, and their chances of approval increase if they have a cosigner.

What should you do now? The first step is to find someone who is willing to become a cosigner for you. This can be a guardian, parent, or another relative. The person who will act as your cosigner should not be legally related to you; so, you can ask a close friend of yours or a colleague as well. What is important here is that this person has a very good or excellent credit score, holds a credit card, and has outstanding repayment history. Ask them to cosign for you, making it clear that they will be the ones to pay back your debt in case of default. Do your best to convince your friend or relative that this will not happen. Discuss your sense of financial responsibility and maturity.

If you have found a person to cosign for you already, look at various credit cards for students. Check with the local banks and big banks in Canada (e.g. Bank of Montreal, CIBC). When checking credit card offers, look at two things – whether you meet the requirements and whether the card in question meets your needs. Important considerations are annual fees, interest rate, rewards programs, etc. Ideally, you will choose a credit card with no annual fee. If this is not an option at the moment, charge items on your credit card for a year or so and ask your credit card issuer to waive the annual fee. Be sure you understand all fees that go with your credit card of choice. Most credit card companies impose late fees and over-the-limit fees. However, some cards go with unfair fees, for example, an account maintenance fee.

Keeping this in mind, back to applying. The application process for student credit card is much similar to when you apply for other credit card types. The difference is that your cosigner has to call customer service, dialing the number on the back of their credit card. They have to explain that they have decided to cosign for you.

Keep in mind that not all credit card issuers allow applying with a cosigner. Some companies do not service joint accounts. Others require that you have a guarantor, even when mailing you offers. But do you need a guarantor? This will make you charge in a more responsible manner. Thus, you are more likely to pay off your balance knowing that a friend or relative of yours would have to pay the bill instead of you.

What else to keep in mind? It is a good idea to have a low credit limit with Canadian student credit cards in the beginning. You are less likely to overcharge this way. If the credit limit is set high, you may overcharge and accumulate excessive debt.

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