Credit Cards for Students

Being a student is not so easy from the financial point of view. College is expensive and most of the students have a hard time making ends meet. Since they do not have much credit when they start school, it is the appropriate time to start building a credit history by applying for a student credit card. These credit cards are especially made for students, based on the assumption that they have little or no credit.
Many college students are living on the verge of a financial crisis, so applying for a student credit card can free them from the burden of unexpected costs. Recent statistics have shown that around 92% of the students have at least one credit card by their sophomore year. The banking industry began to break through the student credit card market in the late 1980’s and it suffered an explosive growth over the last decade. As a result, most credit card companies are focusing on students. The unfortunate thing is that students usually apply for these after seeing only one offer, without comparing it to the other options. That is why parents are advised to help them find the best credit card with lower rate and reasonable spending limits.
Student credit cards are a two sided problem: they can be either a positive or a negative experience for students. If managed carefully, there are many advantages:
- It gives the students the opportunity to start building their credit history, which later can help them obtain loans more easily, better deals on car loans and even more in the future.
- By making their monthly payments on time each month, they learn how to handle credit responsibly, in order to build a strong credit profile, and actually benefit financially from it.
- They also get rewards and bonuses; they might get free air travel, cash back bonuses or other rewards to help them out living on a student’s small income.
- These credit cards also have a huge educational role, because students learn valuable lessons about life, about where the money goes each month, they realize the real cost of things and more important – they learn how to live within a budget.
- Credit cards give them the safety of being able to eat in case of a financial crisis, but it also comes in handy in actual emergencies.
- Gives the student a sense of independence and responsibility.
There is also the danger of the student falling into debt even before graduating college. Statistics have shown that students have an average of $2,200 in credit card debt. The reason for this is that they being so inexperienced they do not fully understand how to handle credit. The best advice for them is not to spend more than they can afford to pay back in a month. Decide a limit and stick to it. They have to be taught to be careful: to only use cards for necessities, to pay the bill entirely each month, not to apply for more credit cards and to manage responsibly the credit.
However, it is very important to understand the risks as well as the benefits of credit cards, the consequences and the responsibility of regular monthly payments before actually signing in for a student credit card. Don’t take the first card that you are offered, but look for the best rate and the best terms.

Concerned of the students’ debts, some schools are even banning credit card companies, or limiting their rights to visit to a few days, by this trying to protect the students’ interests.
Getting a student credit card is easy; many of them can be achieved even if the student does not have a regular job. Even though, each person should study the details carefully to make sure that it is the right card for them, because some of the cards can have disadvantages - students are often charged higher interest rates, this meaning that most of the money they pay each month goes towards interest rather than the principle. Another disadvantage is that the rewards they get are not always entirely free, because the credit card company is earning interest from them every month. Each card is very different, there does not necessarily exist a best student credit card. With a little work and research, every student can find a card that is the most suitable for them.
Although credit cards have many advantages and disadvantages, it depends on each student to make the right choice about the outcome. The best choice is to put themselves on a restrictive budget from the beginning, to avoid getting into debts. A budget can help them stay in line with expenses and help them move towards a brighter future.