Students and Credit Cards

To most students, getting a credit card seems like a good idea.  To many, it represents extra money.  In reality, extra money doesn’t exist and if its availability is mismanaged it can lead to long lasting financial woes.

Students are targets for credit card companies.  If they can get them on a credit account early in life, they’ve got them long-term.  However, these offers are not all they seem and can prove problematic for young people.  It is important for students desiring credit cards to understand everything they can and become knowledgeable users.

Direct marketing campaigns net thirty-seven percent of all credit card holding college students.  While as many as forty-nine percent of these students reported paying their balance off every month, numerous students are carrying forward balances of one thousand dollars or more.  Fifteen percent of students are carrying forward balances of five thousand dollars or more for long durations.

Many students feel obligated only to make the minimum payment and pay little attention to the balance, interest, and fees.  The debt a student builds with this extra money while attending college will follow them and can cause financial problems at a point where they are just beginning their careers.  In fact, in this day and age where employers often run credit checks as part of an overall background check, a young person might find himself adversely affected by credit card debt even before he embarks upon gainful employment.

Credit cards for college students are a serious consideration.  Their use should not be regarded with a cavalier attitude.  So, before you get a credit card, educate yourself about some of the misconceptions.

The more credit cards you have, the better.

This is wrong.  There are too many balances to juggle when you have numerous cards.  If you’re late on just one, it can upset your status with the others.  True financial strength is reflected by the lack of need for credit, not greed to obtain it.

It’s okay to carry forward the balance.

This is also a misconception.  Fees and interest attach themselves every time you carry a balance from one month to the next.  It would be best for you to pay the balance off in full, every month.  If you set this schedule, you’ll realize soon enough that credit cards do not represent “extra money”, but money you’ll have to come up with in the end, anyhow.

I got a special deal because I’m a student.

Think again, credit card companies are in the business to make money.  While the offer in the mail might have seemed special to you, it’s no better than the deal most people are getting.  Check the fine print.

If you’re a college student, you probably should have a credit card for emergencies while you are far from home.  But you must be smart about it and realize that credit does not represent extra money and don’t carry any balance forward if it’s at all possible to avoid doing so.

The idea of getting a new credit card is very exciting, when you are a student. But credit card companies are not distributing them as promotion. They do it for more profit and more business. So if you are a student, what to see in a credit card offer? Chintamani Abhyankar offers useful tips on picking right credit card for students.