The Drawbacks of Student Credit Cards

It used to be that students don’t have the opportunity to get credit cards on their own. People who don’t have a credit history are often required to get a co-signer if they want to get approved. Co-signers must have a good or excellent credit history to guarantee another person’s account.

Nowadays, students are given the chance to establish a personal credit history using a student credit card. Even without a co-signer, students can get approved without any difficulty despite not having credit. Are you one those students thinking about getting your own credit card? What are the drawbacks of owning a student credit card that you should take into account?

Drawbacks of Owning a Credit Card for Students

Student Credit Cards in the 21st Century

Since student credit cards have been introduced in the market, many young people have opened not just one account, but multiple credit card accounts in their name. Yes, having a student credit card has its benefits such as being able to build an early credit history and is also a convenient mode of payment. Nevertheless, when used carelessly, credit cards can also endanger a person’s credit history and financial stability.

Experiences have proven the dangers of uncontrolled credit card use, particularly among young people. Apparently, students with credit cards are more prone to overspending or impulsive buying compared to those who don’t own credit cards. Some college students even graduated with bad debt and others had to file for bankruptcy just to get themselves out of debt.

The Drawbacks of Student Credit Cards

It is so easy to use credit cards for just about any type of purchase. This flexibility and convenience can also prove to be a disadvantage for young people who can’t control their spending. The most common mistake that a credit card holder can commit is submitting only the minimum payment. Instead of paying the balance in full, most student credit card holders opt to just pay the minimum due and carry over the rest of the balance for the next due date.

The problem with this way of using credit cards is that debt builds up in your account. As you carry over unpaid balances in your account and continue to use the card for new expenses, charges accumulate and before you know it, payment becomes a very difficult task to handle. Many people have fallen in the debt trap because they didn’t pay attention to their credit card charges.

One problem may lead to another. As you prolong your balance in your account, you are also at risk of maximizing your credit limit. Many students used up their credit lines to the full. Some even exceeded their limit. Financial experts discourage credit card holders from using up more than 50% of their available credit since this behavior puts them at a higher risk of uncontrolled debt and can badly affect their personal credit history.

Clearly, being aware of the possible drawbacks of using student credit cards can make you become more conscious about your habits. A credit card for student must be handled with caution and it is up to you to exercise self-discipline to stay out of trouble.

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

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