Student Credit Cards Can Be Helpful
When consumers thought of student credit cards, the general consensus was that credit cards in the hands of students spelled a world of disaster. This sentiment has come about as more people are seeing the increase of students that have been buried in debt. And, this is all during a time when financial aid comes with many freebies in the form of Pell and University Grants, and not so free handouts such as student subsidized and unsubsidized loans. Students and parents alike are already worrying themselves about the mounting debt that accumulates from attending college courses, and to throw a wide variety of student credit cards in the mix, doesn’t seem all too great of an idea. Nevertheless, parents and students can find ways to add credit cards to the mix of student financial activity.
Student Credit Cards Used Incorrectly, Can Mean More Debt
Nearly 2/3 of American college students have to deal with some form of debt. Nearly half of college students in their twenties have not been able to pay their balance minimums. In addition to this, the same amount have been dealing with more financial pressures than students did in previous generations. Revolving debt, which includes student credit cards, have skyrocketed to a staggering 24%. With all that’s said and done, it can be a little scary to think about handing your new college student a shiny piece of plastic. But it is important to note that before you whip out the student credit cards (Or even before your college student signs off on one), the instilling of proper spending habits early on will help curb this rising debt ceiling. The best that any parent can do is not to restrict the use of student credit cards altogether, but to educate students and teens about the importance of debt evaluation and spending. And, it couldn’t hurt to educate them on the need to compare credit cards, as well as definitions and terms to help them understand how the concept of revolving credit works. This will prevent members of the younger generation from jumping into a pool of debt, when school debt alone, is already enough.
What Kind of Student Credit Cards Should You Get?
In addition to considering whether or not students should have student credit cards, consumers also wonder which ones will serve students the best. One popular option is the secured card, which works a lot like a prepaid debit card. Students are then able to limit their spending to how much they have for their budgets. These kinds of cards can also be the best option because they are often fee-free. But if you must skip the secured card, and you feel your student is a little more responsible, the Citi Forward Card for College Students is a great way to reward great spending habits.
Contrary to popular belief, handing a student a credit card does not always spell financial ruin. Take the time to invest in educating your student on proper spending habits, and spend time researching student credit cards that will work for their needs and their budget.
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