Credit cards have become very common nowadays and almost all students have and use student credit cards. Some of the students are wise enough to use them sensibly in order to build an early credit history, but others accumulate lots of debts that would have to be paid off once the student life is over.
It is important that students use their credit cards responsibly. Once they get a credit card, they should learn how to take charge and manage their own finances as soon as possible, as the time between teen years and adulthood is very short and no one would want to start their professional careers while already in debt.
Therefore, the sooner a student can start managing his own financial matters, the sooner he will develop useful financial skills. Student credit cards are now considered a social entitlement and are no longer a privilege for wealthy students only.
Where should I get a Student Credit Card?
It is quite easy for students to get a student credit card. Credit card companies are willing to make students their customers and thus their offers can be found everywhere where students are. Offers are available in campuses, at social functions, in student’s mailboxes and in bookstores, etc.
Are Credit Card Companies willing to give cards to students?
Credit card companies go after students eagerly because they consider students to be good customers. This is because first of all, students are loyal; once a student obtains a credit card, he is likely to keep this particular card for many years to come and instead of getting other new cards he is likely to upgrade it every time the need arises.
Conditions to get a Student Credit Card
Nowadays, there aren’t many conditions set to obtain a student credit card; therefore more and more students have access to them even though they don’t have a steady source of income.
This is also one of the main reasons why credit card companies offer more and more credit cards to students. Most of the students usually can’t repay their debts in time. And this is what credit card companies rely on; they make a lot of money from late payment penalties, high interest fees on unpaid credit card balances, annual fees and more.
So for them, the students that don’t repay their credit card balances in full each month are the most profitable customers.
Advantages of a Student Credit Card
There are many advantages of a student credit and with the increasing reliance on the Internet; the use of credit cards has increased which is especially easy for students as they are able to do their shopping online easily.
Financial advantages
Nowadays, every college freshman wants to have at least one credit card as it can help him very much during his college years; having a credit card will enable the student to rent a car, buy books or concert tickets, provide himself help with medical or other emergencies and more.
Building a Credit History and Credit Score
There are other advantages of student credit cards too apart from the financial help. Student credit cards can be used to build a credit history. Credit history is the record of everything that happens regarding your financial situation throughout the years. Whereas, credit scoring is a system based on all that happens to your accounts: late payments, bill paying history, number and type of accounts, outstanding debts and more.
This early history can help the student in his future life because if the credit history and scoring are good, it will be easy for him to obtain a house or a car loan, certain types of financial jobs, insurance premiums and many other benefits.
Therefore it is important for the student to pay his bills in full or in time, in order to benefit later. A good credit history will prove beneficial in the future but a bad one will affect him too, thus one has to be careful about the financial matters.
Choosing a Credit Card
It is quite difficult for a student to choose from the large number of student credit card offers. One of the best ways to choose a credit card is by talking to other students and getting advice from the students that already have and use a credit card. Students can also compare credit card offers online.
But before going for any credit card, the student must be aware of the card’s terms of use. It is better to go for a card that has no annual fee and the comes with the option to limit the amount to be spent.
Safety measures
It is important for students to be very careful when using their student credit cards. They should be cautious about the amount charged on the credit card and, should review the amount of interest they have to pay monthly regularly. It is also recommendable that the credit card balance to be paid as soon as received. If he is unable to pay the bill in full, the student must pay at least the minimum payment required.
The student must ask help from a financial counselor in case of any problems. The student loan repayments are much more flexible than consumer loan repayments and the counselor will surely be able to help out.
Identity Theft
Students must also be careful about identity theft. They should never give the credit card or social security numbers to anyone over the phone as these are important information an should not get into the hands of wrong people.
Thus we can consider that it is best for students to have a credit card starting with their freshman college years because, if used wisely, the credit card history built in this period will very much help them throughout their entire life.
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