A Lesson in Student Credit Cards

In today’s academic world, most students need a college student credit card and the offers for these are plentiful. Many creditors are very anxious to have the new college student apply for and get approved for a student credit card, because they realize that if they can strike up a good relationship with this customer at this young age, then it is highly likely that they will be there customer for life. 

But the ease of getting a college student credit card is also the bad news because many college students have not yet learned responsible financial management. The temptations when a student is away from home, living in the dorm or an apartment, are tremendous. You can easily spend a little and have a night out at the bar or dance club, chip in for a keg of beer, whipping out the plastic to get airline tickets for the spring break trip to Florida and the list goes on. What happens is that the student is tempted to view this as free money since there are not dollars bills floating out of his wallet at the time of the purchase, so it almost seems like they are getting something for free. But make no mistake about it, there is nothing fictional about the fact that this student has just racked up some charges on that college student credit card, and it will be a taste of stark reality when he starts to get calls from the credit card issuer asking for payments to be made on time.

Not all possible and available college student credit cards are right for everyone. You should avoid one that charges an excessively high interest rate, unless you know for a fact that you will be paying it off in full at the end of the month. Keep in mind that the credit card issuers are taking a bit of a chance on you, since you probably have little or no credit history established, and therefore the interest rate on virtually any credit card you are approved for is going to be higher than usual. Where the usual would be the rate that perhaps your parents would get approved for, since they already have a credit history established.

You need to be honest with yourself in that you can be financially responsible with your college student credit card and you are the only one that can answer that. If you were not sure, then perhaps a secured card would be the best place to start. This is where you make a deposit with the card issuer, say a bank or credit union, and then your credit limit is the amount of your deposit. This is actually a great place to start and to learn fiscal responsibility and to get used to getting into the religious habit of paying your credit card bill on time every month. You would learn about how the interest can add up, and unfortunately, how late fees can also add up. But it is a lesson that you will learn quickly, and the good news is that you will remember that for the rest of your life.