The answer to this question is both “yes” and “no”. There are downsides and upsides to student credit cards. Disadvantages include being unable to make the minimum monthly payments, not taking the time (you have other things on your mind!) to read the fine print, and being unable to withstand spending temptations. Others include being overburdened with high interest rates, and, of course, falling victim to plastic predators who take advantage of your financial innocence. All of these problems basically boil down to lack of financial maturity and responsibility. A lot of times, students barely make their monthly payments, and it gets to the point where their providers raise the minimum payment to get them to cover their outstanding balances. This can be a very unpleasant situation. Missing a single payment will result in your issuer’s increasing your interest significantly. It can easily be pushed up to 30 percent.
So what are the pluses? Living in the Western world – even Canada, a country far from the mega-commercialized standards of the US – you will eventually have to start building a credit history. Your college years are a good time to start. You have learned some responsibility by then – hopefully, seeing as you are no longer 16, but you are still not burdened with the prospects of having to hold down a job, father or mother a child, and make a spouse happy. You are going to parties, playing sports, maybe studying for midterms. The point is, you have free time. You can use this time to grow as a person in the sense of learning financial responsibility.
If you set off on the road to a good credit rating, you will find your credit score increasing. This will matter when you want to buy a car or get a mortgage – when adulthood finally sets in and your teen years are mercilessly left behind for good. Finally, the little piece of plastic will help you cover unplanned expenses.
It is very likely that you will have very little money after you graduate, and you will need a loan for something. So, you will be very happy you made all those payments on time.
If you decide on getting a credit card in college, get one with a limit first. $500 is a good limit. If you are the type that loves undergoing shopping therapy, do not get a credit card. Go with debit, so you can’t spend more than you actually have. Also, if you are in college and are under 18, know that your application will be rejected. Do not get a credit card if you do not have a job. Do get one if you want to build a credit history and credit score, if you want to be successful or if you are disciplined. Discipline is key to successful credit operations.
Banks are competing wildly for student clients today. Some offers targeting this group are the Discover Student Card, Chase Student Flexible Rewards, Discover Student Monogram Card, Discover Student Platinum Card, the Chase Student Flexible Rewards Card, and many more.
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