Student Credit Cards – A Look at the Advantages and Disadvantages of Having One

There most certainly is a lot of talk about the perils of credit cards lately and most of it has been spurned on by the poor economy. While much of the scorn is well-deserved, some of it is downright nonsense. Student credit cards are an excellent example of this dichotomy.

As a part of the credit card reform legislation consumers under the age of 21 will not be issued credit cards unless they can either show proof that they have the ability to pay them off or have a cosigner that will accept responsibility for the debts if the primary cardholder defaults.

The stories of credit cards for college students being abused by many irresponsible cardholders doesn’t mean that everyone shouldn’t be able to have access to credit. It is patently unfair to judge everyone by the actions of some people.

Advantages of Student Credit Cards

There are, to be certain, quite a few advantages for students to have access to a credit card. First and foremost they can be used in case of emergency. We never know what surprises life has in store for us and for many college students getting cash from home in an emergency is simply unrealistic.

Another advantage is that used responsibly, credit cards are valuable tools that can teach young people the value of living within their means and spending responsibly. With a lower limit the student should be able to handle managing their expenditures.

Building a strong credit history that will serve the young cardholder well throughout their lives is also a very important factor to consider. Having an established credit rating will greatly help that person after graduation to secure financing in the form of automobile loans and home mortgages.

Disadvantages of Student Credit Cards

The disadvantages of student credit cards are well documented indeed. Using a credit card to pay for beer and pizza is not the kind of fiscal responsibility that the young consumer wants to pursue, yet it happens all too often.

Frivolous spending often leads to large balances that blanket the students in debt well beyond their college years. While you add that debt to the amount that many will owe on student loans and you can see how that could quickly become a substantial financial issue for many.

And if bills go unpaid then a poor credit history will have been established. When that happens the individual will have a difficult time obtaining credit in the form of car loans, personal loans and mortgages. And if they can still get credit it will cost them more in the form of higher interest rates because they will be seen as being a greater risk.

In the end it all comes down to having responsibility for oneself. Far too often the credit cards themselves are made out to be the villain when it is in fact it is the cardholder’s responsibility to act appropriately.

There are in fact a great many advantages for a student to have a credit card, but it is up to the student to show maturity by using them wisely. If they do that then the cards will have served them well.

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