Student Credit Cards Student Credit Cards – Great or Awful Idea Does by Ardi.Track


									               Student Credit Cards – Great or Awful Idea?

Does a college student need a credit card? Better yet, should a college student apply
for a credit card?

We all know that new credit card laws have made it more difficult for college students to
obtain a student credit card. Now college students (and anyone that signs for them) need
to think twice before getting that first credit.

There are many responsible credit card usage tips that college students can follow. On the
flip side, there are also many college students that will fall victim to the credit card debt
trap at an early age.

The question that I often receive in some shape or form is- should a college student have
a credit card?

My answer is simple- all college students should have a credit card.

Before a mob of parents runs after me with blazing torches, allow me to explain myself.

Benefits of a Credit Card For College Students:

   1. Build your credit rating.
      When you make your first major purchase, whether it be a car or home, you will
      realize that one thing is very important- your credit score. This number makes a
      world of a difference. Before you do anything else you need to read about the
      importance of a credit rating.

       The earlier you get a credit card the early you can build your credit rating. Yes I
       do realize the flip side here but please bare with me and continue reading for now.

       Your credit rating becomes very important as you graduate from college and
       progress through your 20s. If you begin building up your credit at an early age
       you'll notice some big wins.

   2. Reap the benefits of a high credit score in your adult years.
      A high credit score can save you a boatload of money over the period of a loan. A
      high credit score means that you have good credit. Good credit means that lenders
      feel it's less of a risk to loan you money. Since it's less risky to loan you money,
      you can receive a lower rate on major purchases when they happen, and believe
      me they will happen.

       A lower rate may not seem like a big deal now, but trust me it will be one day.
       Unless you buy your first new car or first home with 100% cash, you're likely
       going to have to apply for a loan. You don't want to be in your 30s kicking
       yourself in the butt for messing up your credit or for having no credit.

   3. Get used to a credit card.
      Chances are very high that you're going to have to deal with a credit card for the
      rest of your life. There are adults that refuse to possess a credit card or are
      vehemently against credit cards (see: Adam Baker or Matt Jabs), but it's fairly
      rare to not have a credit card.

Cutting up your credit cards is too simple and it won't solve the problem. You should get
into the habit of using a credit card and paying it off monthly ASAP.

Okay now let's go a bit further- what if you think the reasons for having a credit card are
decent but you're still not fully convinced on student credit cards? A college student
should only have a credit card under the following conditions:

Student Credit Card Conditions:

   1. It's a student credit card with a minuscule limit.
      A couple of hundred bucks to $500 max! Until you've mastered your financial
      situation completely you shouldn't accept anything over $500. A high amount of
      credit available to you can be very beneficial, but it can also ruin you financially
      if you don't control yourself. All college students should start off with the lowest
      limit possible and not increase it until income grows. On top of that, it's also
      becoming more difficult for college students to get more than $500 worth of

   2. The student credit card is used for reoccurring monthly expenses.
      I've automated my credit card to pay for my gym membership, cell phone bill, and
      a few online subscriptions (I swear it's not porn!). A simple way to build your
      credit without buying useless junk is to automate reoccurring monthly expenses to
      your credit card. We all have monthly expenses. So why not simplify your
      financial situation and automate your monthly expenses with your credit card?

   3. The credit card is only used in emergencies.
      Yes I know that some will view an "emergency" as seeing a pair of jeans on sale
      at Banana Republic. This is where the $500 limit comes into play. Even if you
      lose control and splurge, you won't go bankrupt because of it. You'll probably
      have to suck it up and get an extra job to pay the credit card off, but you won't
      destroy your finances.
A credit card is also extremely critical in real emergencies. Shit will happen in life. There
will be times when you need money to pay your way out of trouble. Whether it be paying
for a tow truck while stuck on the side of the road in the winter to having your flight
delayed. Hopefully this sort of thing doesn't happen to you. But if it does you can use
your credit card and then pay it off with your emergency fund money when you get home

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