Student Credit Cards

For students in college or even high school, these days, it’s not difficult to get an offer for a student credit card. Credit card companies are offering these credit card deals in bookstores, on campuses, at social functions, and in students’ mailboxes. Offers for student credit cards can be very attractive to students, who see it as a way to cover extra expenses such as textbooks, meals, transportation, clothes, and other educational and non-educational expenditures. For a young person who has no credit history, the cards are relatively easy to obtain and may be offered with no annual fee, credit card rewards programs or other attractive features. However, without proper preparation, a student credit card can become a two-edged sword in the hands of a young person who does not understand how to use credit.

First of all, without a steady source of income, some students can get themselves into trouble with late payments, or by carrying large unpaid balances at a high interest rate. Many students also don’t realize that they are establishing their credit history by using their student credit cards. Your credit rating is based on a number of factors including your history of late payments, the number of accounts you have open and what outstanding debts you have. Accumulating a lot of debt, or a history of late payments, can adversely affect your credit rating and lower your credit score. A low score can come back to haunt you down the line when you try to buy a car, or even buy a house when you try to get a line of credit at the bank and you’re not able to get one.

However, using a student credit card can also be an opportunity for you, as a student, to build a good credit rating and establish a history of on-time payments. But it’s important to use the student credit card wisely and make sure you are planning ahead financially. Before you acquire a student credit card, be sure you understand the card’s terms of use, what the interest rate is and what annual fees you will be incurring. When you get the card, pay attention to your payment due dates and if you can’t pay off your entire balance every month, pay over the minimum whenever you can. If you use a student credit card wisely, it can help you develop important financial management skills that will serve you well throughout your adult life.