Credit Cards and High School Students

The Federal law doesn’t provide any restrictions about issuing credit cards to minors. In fact, credit card companies consider teen-agers as a very profitable market. Most credit card companies often require a co-signer when a minor applies for a credit card. When a teen-ager reaches the age of 18, he has the right to sign-up for his first credit card on his name even without a cosigner.

Are Student Credit Cards an Advantage?

Some parents feel that providing their kids with credit cards while they are still in high school help them learn about money early in life. With proper guidance and support, obtaining a student credit card can help young people learn about how to handle their finances properly.

A credit card for students is a great way in establishing a credit history in preparation for their future. Some credit card companies refuse to grant credit card approval for those without a credit history. But with the help of a parent as a co-signer, it will be much easier to get a credit card.

Or a Disadvantage?

On the other hand, a young person with a student credit card can also get into trouble. The convenience that a student credit card can bring may lead to uncontrolled spending. With just one swipe of the card, they can purchase an item easily at any time. Eating out in restaurants with friends is also just as convenient. They can easily do so without bringing with them any cash.

The problem comes when it’s time to pay the bills. At the end of the month, their billing statement may reveal that they have spent more than their alloted monthly budget. It is also a possibility that a student who does not think about his spending for the past month has already exceeded his allotted credit limit.

The Role of Parents

With this in mind, it is very important that the students themselves realize the value of credit and how to use credit cards to their benefit. Parents play a big role in helping their kids understand that credit cards should not be used like cash. Instead, every time they use their credit card to buy something, they should already plan out on how to pay back that purchase. Students must be reminded that serious thinking must be done before they use their credit card to make a purchase.

If you own a student credit card, be aware of the dates when you should be paying off your balances. Even if your parents are helping you to pay your bills it is crucial that as early as now, you learn the responsibility of paying your debts on time. Once you finish school, you will have the sole responsibility of paying your debts. By learning how to use your credit card wisely and putting it into practice, you won’t have a hard time managing your finances later on.

Student credit cards can be an advantage or a disadvantage for students. It will all depend on whether they will use their student credit card wisely and prudently.

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 2008