Card Credit Student Blog

Every year, college freshman are bombared with offers for student credit cards. Parents need to talk about in talking about the responsibilities that go with having a credit card, before their son or daughter goes off to college.

I’m not suggesting that it’s a bad idea for college students to have their own credit card. Actually, it has many benefits, but it is essential that they get the right card and use it carefully and prudently.

The benefits of a student credit card are clear. Parents won’t need to be continually sending money and students will be able to make normal purchases more easily. They will also be prepared for unforseen “emergencies.” Moreover, since most credit cards have a preset spending limit, parents can be sure that spending will remain within a pretermined amount. Parents should remember to request a relatively low spending limit, since credit card companies are often too liberal in the spending limits they assign to student credit cards.

Parents may wish to have the student credit card used only for emergencies. In that case, this must be made quite clear to the student.

Some credit card companies offer very low “teaser” rates in the beginning for a limited period of time and then jack up the interest rate to an exhorbitant level afterward. Always check out the interest rate that will apply after the introductory period.

Another pitfall to avoid is paying only the minimum payment each month. Often, the minimum payment only covers the interest for that month, and little or no money goes toward paying the principal. In that case, it may take decades to pay off the balance. In fact, if no money goes toward the principal, the balance will never be paid off!

Many credit card companies offer the ability to manage the account online. This is a very convenient feature. Students can check their balance or make payments from their checking account 24/7.

This feature also allows parents to monitor the account, even from thousands of miles away. This level of accountability adds an extra margin of safety and reduces the chances that the student will get into trouble by over-using the credit card.

When the students go way from home to study they usually have a lot of expenses and for them to have own money there are a lot of services such as different credit cards which can make things easier. Different companies can offer great number of cards and it is up to the client to choose any he likes. Credit card is the best variant in this case. Of course it is necessary to be very careful with it. Someone chooses the cards that do not permit cash advance privileges. The temptation for the new college student who lives far from home is that this now represents “free money”. Usually student credit cards have a lot of benefits, such as:

The growth of the responsibility of the financial management. Students are free to spend as much as they need any time they lack of money. Becoming versed in the fine art of budgeting and planning in advance. College is expensive, if the student does not get any grants or scholarship the card is the best way out for him.

There are many card issuers who are very concerned about offering a credit card to college students. Very often these cards are with a lower credit limit, maybe $500 and also since college students are normally viewed as a risk due to small experience with financial commitments, the interest rate on the unpaid balance grows significantly.

But if a student demonstrates or learns responsibility with a college student credit card that will teach him the benefits of having one and keeping it fiscally sound. The student is rewarded with a fine credit score at the credit bureaus, so they are established already in that area by the time they graduate. And the card issuers know very well that with that good experience, that college student will be probably their credit card customer for life.