Do Students Really Need Credit Cards?
Some adults may feel that providing students with credit cards is completely unnecessary. Some of them may think that handling a credit card to a young person only tolerates overspending or splurges. But while it is true that many students have fallen in the debt trap, the benefits of credit cards are still obvious.
Student credit cards are exclusively offered for students who are in high school or college. A person who has graduated or out of school cannot get approved for a student credit card. If this person happens to have no credit history, then he/she may have to get a secured credit card.
Therefore, students are given the opportunity to build an early credit history for themselves so that they can be ready to face financial challenges when they graduate from school.
Interestingly, those with good credit history are given better deals by lenders because they have proven how well they can handle credit. Hence, a student can easily acquire the best car loan or personal loan deals if he/she can show a history of good credit.
Instead of discouraging students from owning a credit card, it’s best to encourage them to become more responsible and more conscious when using their student credit cards. With proper management, it should not be difficult for a young person to enjoy his/her privileges as a credit cardholder while building impressive credit history at the same time.
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To avoid bad credit, a student credit cardholder must learn to exercise a limit to his/her spending and always be on time with submitting payments. Paying on time will be easy if the balances to be paid are within the student’s budget range. Thus, if you are a student, it would be wise to avoid using your credit card for purchases that you can’t pay back in full.
Regardless of how high or low your credit line is, you can save yourself from a lot of trouble if you avoid maxing out on your available credit. If you must use your student credit card, see to it that the amount of your balance will not exceed 40% of your credit limit. By doing so, not only will you protect yourself from the risk of bad debt, you are also keeping your credit history in good shape.
About the Author
Samantha Wilson is a consultant for credit cards for students. For years she has written student credit cards articles that would help build student credit.
Copyright 2009
Clearly, students do need credit cards to build credit history and to train themselves on financial management. If you are a parent, you can provide support and guidance to help your kids stay away from bad debt and use their credit cards with care.
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This was a big question for me after my son asking me to get him a credit card for college. Now, I understood why he needs it, but of course, we’ve set an agreements about it.
@ legitimate money making
It’s good to have an agreement between your son, at least they’ll know their limitation and responsibility.
Yes, I really need a student credit card especially for emergency purposes.
@ Henry
It’s good thing to hear that it really help you in your studies. I hope you will not get into bad credit again..
Great post! As a student, I found it extremely comforting to have a credit card; it would save me in emergency situations, where I was not able use my debit card (we do not have similair credit ratings in Europe as in the US, so this was quite irrelevant). I am not a parent myself (yet), but I would definitely encourage my son/daughter to get a credit card. Actually, I think the topic personal finance should be a standard element of education, to teach teens and students how to manage their finances more efficiently.
@ Aleks
Thanks for sharing your opinion. It’s a great start for students to start their personal credit as early as it is.