Finance Joe Boyd on 15 Oct 2008 12:39 pm
Should College Students Have Credit Cards
Everyone knows that their credit rating can significantly impact their lives. A good credit rating results in better lending rates, when you need to apply for a loan and can even make a difference in your employability.
Just a few years back, credit card companies were giving out cards to absolutely everyone. You’d get credit card offers almost non-stop which offered low interest rates and high credit limits. Then, credit cards for college students were a big sector of the market. Credit card offers were mass mailed and all you had to do was fill out the application. People got on the bandwagon in droves, buying all of those things they couldn’t afford outright, but could make payments on.
If you weren’t raised by financial whizzes and especially if you’re a young person, you might not have any idea how to manage your money. If you see that “must have” item, you just pull out that plastic, forgetting that the bill will come due at the end of the month.
If you are in college and see a lot of these offers for credit cards for college students, you may want to talk to your parents before signing up for anything. They may have their own experiences to share with you; they may have taken on more debt than they could handle when they were in school themselves. Eventually, your mom or dad got themselves into a deep debt which took years to pay off; don’t follow your parent’s example in this case.
It may surprise you to find out that these credit cards for college students are just as prevalent as they ever were; of course, the costs associated are far higher now. Remember that a single late or missed payment can result in your having a very high APR from there on in.
There are credit card companies which may not ask for a lot of information before giving out that card. You have the responsibility to read all of the fine print (yes, all of it) before you sign anything. These credit card agreements tend to have a lot of small print and be quite long - to make you not read it. Read it anyways and make sure that you understand all of the terms and conditions.
Use caution when looking at credit cards for college students and read the cardholder agreement very carefully before you sign. Remember, this card isn’t some windfall; you need to be able to pay off the balance every month. If you do have an emergency and max your card out, then you should make at least three times the minimum monthly payment to pay this balance off as quickly as possible. If used wisely, a credit card can be a great thing for you.
