Students Credit Cards - Are They a Good Idea?


Defined Tag: Students Credit Card.

Registration time at a university can be pretty hectic. In addition to setting up a class schedule, securing books and supplies and finding the dorm room assignment, students these days often navigate through a number of vendors that offer students credit cards.

Types of students credit cards vary. Some are secured accounts, which require the student to deposit a minimum amount into a savings account. The credit limit is determined by the amount of funds contained in the savings account, and can be adjusted upward as the student makes regular payments and deposits additional funds into the savings account. A great way to give a freshman a taste of what it is like to manage money, these secured students credit cards encourage building up an excellent credit rating as well as creating a financial resource that will be very helpful once school is completed.

Other forms of students credit cards are like the more traditional ones and are guaranteed by the parents or guardians. While not requiring a savings account as collateral for the cards, the interest rates are significantly lower than those issues to persons not attending college. Again, money management skills are the goal of having the cards. In a society where a good credit rating is almost mandatory, the habits of making sound financial decisions can be developed as the student works toward his or her degree.

One real danger is that there is nothing to stop the student from applying for and receiving multiple students credit cards. Here the parent or guardian should counsel the student to be careful of overextending their resources. A student is just as capable of falling for the allure of easy credit as any adult. The added burden of debt that cannot be repaid according to terms will result in bad credit and may impact the collegiate career as well.

Every parent or guardian should consider the student's maturity level and decide if easy credit is a good idea. Students credit cards carry the same risks as any credit card plan, as well as the perks. Before your student signs up for anything, make sure he or she understands how the card is to be used properly.

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