Student Credit Cards: Advantages and Disadvantages
Although some people object to college students having credit cards, it’s not an entirely bad practice. Credit cards can offer several advantages to college students. However, there are also dangers inherent in their use.
Some of the advantages include:
• Learning fiscal responsibility. Controlling their spending and limiting it to what they can repay doesn’t come naturally to most young adults, but they soon learn that it’s necessary if they are going to stay on top of their limited resources.
• Building a credit history. It goes on a person’s credit history when they charge small amounts and repay them promptly. Those positive records will follow them when they want to rent an apartment, buy a car, or apply for certain jobs after college.
• A sense of autonomy. At age 18, nobody has to have their legal documents, signed by parents or guardians. This independence helps students make the transition from adolescence to adulthood.
• A resource for emergencies. College students are notoriously poor, and when emergencies come up, they may be left without any means for responding to them. If a parent falls ill, a car is wrecked, or books cost more than their Pell grant, a student with a credit card has means to take the necessary actions.
Some of the disadvantages include:
• Not learning fiscal responsibility. Students who have not been taught the difference between cash and credit often feel and act as though they’ve just been handed a wad of cash that they can spend however they please. If this happens, it won’t be long until they find themselves in a worse situation than they started out in.
• Building a credit history. It also goes on a person’s credit history when they don’t repay their charges promptly. These negative marks will make it more difficult to get credit in the future, when it is far more necessary, than it would be if they just didn’t have credit at all.
• A sense of desperation. No debt digs a hole faster than credit card debt. Many students are already struggling to support themselves, and a heavy credit card burden makes that worse.
• A resource for luxuries. When their friends are going out, but they’re broke except for that credit card, it may feel like an emergency, but it’s one that they’ll be paying for with serious interest.