What are student credit cards and how do they work?

August 6, 2021

6 minutes to read

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Credit cards are financial tools that work both a way topay and a financial instrument . In the first case, they offer a revolving line of credit; that is, a sum of money which is renewed as payments are made and which can be used to purchase a product or service; while in the second scenario, the plastic helps generate a credit history.

According to data from financial coach Coru, 59.4% of Mexicans do not have a credit card, so it is important to develop a good credit history from an early age to be able to access better financial opportunities at home. to come up.

Banking institutions offer products that encourage the financial inclusion of young people; among these options are student credit cards. This type of plastics is designed for the needs of people who are studying or who have just landed their first job and therefore their first income.

“Student credit cards are a tool that helps integrate young people into the financial world. Likewise, it can help them build a credit history, teach them how to manage a revolving loan, and learn about concepts like commissions and interest, ”says Fernado González, CEO of Coru.

How does a student credit card work?

As these types of cards are focused on a student’s profile, their credit limit is not that high. However, it is common to see that banks have an agreement with universities to provide these services.

The requirements for removing plastic vary from institution to institution, but usually a valid official ID, proof of address, a document guaranteeing your status as an active student and a minimum income is required, between 1,500 and 6,000 pesos per month, according to the Bank.

These credit cards may have fees for plastic replacement, late payments, disposal of cash, and annuity. While its limit is not that wide, it can help you pay for school supplies, meals, and entertainment outings, as well as build a credit history.

According to figures from Coru, 30% of credit card users in the 18-24 age bracket withdraw money on these types of products, while almost 30% pay their credit card in full. Only around 20% of young cardholders have had to pay interest at least once.

“Thanks to this tool, a young person can start their financial life and begin to build their credit history. Having a good track record can make it easier to approve a loan in the future, ”says the CEO of Coru.

Which banks offer this service?

Santander – Zero credit card. This card is designed for students. It does not charge an annuity as long as the user spends at least 100 pesos per month. To apply you must be between 18 and 25 years old, present a copy of your current university degree, maintain a minimum balance of 1,500 in the last month, verify a minimum income of 2,750 pesos per month, present payroll receipts for the last two months, present a copy of your official ID and proof of address, in case your new address does not match your ID. If you are a foreigner, you must present a valid passport and an FM2 immigration document.

This card has an average CAT of 77.6% excluding VAT, an average interest rate of 58.86% weighted by the balance and an annual commission without charge.

BBVA – My first Bancomer card . This is the option that BBVA offers to university students who wish to access a credit card. To apply, you must be over 18, reside in Mexico, and have a minimum monthly income of 6,000 pesos. These are the documents that you must present at the branch: valid official identity document (INE or passport), proof of address dated less than 3 months (electricity, telephone or water bill) and proof of income. If you are a foreigner, you must present a copy of your immigration form. With this card, you can receive an alert or an SMS with your travels, carry out transactions with the BBVA app and make online purchases.

This card has an average CAT of 89.9% without VAT and an annual commission without charge.

Citibanamex – B Smart University Card . To apply for this credit card, you must be between 20 and 24 years of age, a minimum verifiable income of 1,500 pesos, and three months of verifiable residence. The documents that you must present to the agency are: an official identity document (INE or valid passport, in case of a foreigner, you need a permanent resident card or a current passport validity), present your valid university diploma or proof of studies and proof of residence with antiquity 90 days maximum.

This card has an average CAT of 91.7% without VAT, an annual weighted average interest rate of 52.4%, an annuity of 352 pesos plus VAT and an annual commission without charge.

These types of tools allow young people to start building a credit history, cover their expenses, get used to how a revolving loan works, and get more and better financial products in the future. quality. For this, it is important that you analyze which card best suits your financial personality and your budget in order to properly manage your account.