What Is Better, Student Loan or Student Credit Cards?

Pursuing higher education poses a big financial challenge. Many students get through graduation with the help of college student loans. Many young people also obtain college credit cards for additional financing. This article tackles some pointers about student loans and college credit cards as tools in building your future.

College Student Loans

Generally, long term financing is supported by student loans provided by the government or obtained from commercial lenders. A college student loan can be used to pay tuition fees, boarding school costs, food and lodging allowance, college books, school projects and other school expenses. It is a known fact that many families cannot afford a college education on their own and student loans give that much-needed financial support for many young people.

Federal student loans are known to have lower interest rates and easier repayment terms. This is especially true if you are eligible to receive the subsidized Federal Loan. However, many students acquire more than just one loan. Aside from a Federal student loan, many students obtain other student loans from Private Lenders.

Most often, students who obtained multiple loans from different lending companies consolidate their debts through a consolidation company. Consolidation is recommended when a borrower manages multiple loans to lower the interest rates and monthly costs. In addition, consolidating makes repayment tasks less of a burden.

Credit cards for Students

What about credit cards for students? These credit cards can provide additional support for a college student. Credit cards can come in handy when emergency expenses arise and cash isn’t readily available. A student can use a credit to make important purchases or pay bills without the need for cash. Afterwards, the charges can be paid back within the billing period.

Credit cards usually allow a minimum due payment which means the cardholder can carry over balances from one billing cycle to the next as long as the minimum due payment is submitted on time. This can be a helpful feature although students need to exercise caution in using this privilege. Students must remember that as they prolong their balance in their account, they incur additional costs and their debt accumulates each month. As much as possible, it is better to pay off balances completely to avoid the risk of bad debt.

Student Credit Cards vs Student Loans

Which one should you choose to obtain – a student loan or a student credit card? Obtaining both a student loan and a student credit card can be a great help in your college education. A college credit card can serve as a back-up financing option during times of crisis. However, a student must exercise self-discipline in using the credit card to keep away from debt trouble.

Students should strive to pay off their student loans as early as possible. There’s really no need to wait until college graduation before contributing to your college loan payments. A student can acquire part time jobs during school breaks and use some of his/her earnings on paying off the loan. Being able to pay off the interest rates of your student loan will make a big difference so that when the actual repayment term starts, it would be a lot easier to handle.

About the Author

Samantha Wilson is a consultant for managing credit cards and finding the best student loans. For years she has written student credit card articles that helps build student credit, and student loan help articles that can be used as guides to handle student loan debt.

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