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College Student Credit Cards

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College Student Credit Cards


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556


Summary:
College is the place where most of us get our first taste of financial freedom and the responsibility that goes
along with it. Inexperienced with debt, college students may apply for a cash back credit card thinking that it
sounds like a no lose situation. They hope to charge large ticket items or living expenses that they cannot
afford to buy with cash and then receive a check for cash back at the end of the year. Unfortunately, a free
credit card offer can appeal to a stude...



Keywords:
college student credit card,cash back credit card,free credit card



Article Body:
College is the place where most of us get our first taste of financial freedom and the responsibility that goes
along with it. Inexperienced with debt, college students may apply for a cash back credit card thinking that it
sounds like a no lose situation. They hope to charge large ticket items or living expenses that they cannot
afford to buy with cash and then receive a check for cash back at the end of the year. Unfortunately, a free
credit card offer can appeal to a student for all the wrong reasons. Instead of building a good credit base and
starting out responsible buying habits, a college student credit card may be used to live beyond the means of
the average student. This can be a trap for students and lead to years of credit damage and negative
consequences.


The college student credit card


College students receive credit card offers on a nearly daily basis. They are included in bags with new
textbooks, campus purchases, and student run newspapers. Offers for a free credit card also come in the mail
marked "Pre-approved". Faced with the idea of a cash back credit card, most students are eventually lured
into replying to one or more of these offers.


In addition, credit card companies, such as MBNA, offer cards designed to target specific college students.
This college student credit card comes in a design that features the student’s university or alumni association
and is appealing for the sense of belonging and exclusivity it conveys. However, it also carries some hidden
dangers that the average college student misses in their excitement to get their first credit card.


Drawbacks
A company that offers a free credit card to college students is familiar with the sometimes precarious
spending habits of the average student. Payments from students are frequently late and the minimum
payment due is the most some young people ever try or are able to pay. This delinquency adds up to a lot of
money in interest and late fees that goes to the credit card company in the form of profits.


Since a cash back credit card offers the incentive of a return on purchase prices, the interest rates for these
cards are usually very high. In addition, the student applying has little or no credit and can only qualify for a
line of credit by promising to pay exorbitant interest rates if late or overdrawn. So in order to lure students
into applying, the lender may advertise a low interest rate for a trial period, such as six to twelve months.
But when the student uses the free credit card, the balance accumulated ends up costing much more once the
higher interest rate takes effect.


But the most dangerous part of a college student credit card is the damage it does to the student’s credit
rating. This damage takes place long after the purchases have been enjoyed and is usually not a factor in the
decision to make such purchases. Impulse buys and peer pressure can add up to serious credit consequences.
The average student has no real understanding of the implications of bad credit, which could follow them
into their careers and family life. They could be denied a car or mortgage loan, as well as further lines of
credit with other credit card companies.




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posted:12/31/2011
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