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Credit Cards

Benefits and risks of acquiring a student credit card

The benefits are plenty of acquiring a student credit card when you are in college. Proper use of credit can help you build a good credit history, which will be immensely valuable when it comes to buying a new car, home or other property. Learning the proper financial skills can help throughout your life.

It is very easy to acquire a student credit card when you are a student. Credit card companies have a big market segment comprised of college students and therefore market heavily to them. Even if they have no credit, credit card companies are still willing to approve their applications. They want them to start using their brand name credit card earlier in life.

A student credit card can help by making payments more convenient for college students. They can charge their books and meal expenses to their card. They do not have to carry cash around with them on or off-campus. They can use it in case of an emergency. Also many companies provide student credit cards that offer great rewards, such as books, Cds, etc.

Despite all these benefits student credit cards also pose a serious threat, so much so that some colleges have restricted credit card companies from marketing on their campuses. Improper use of credit is common among college students, who have not yet matured to have the proper understanding of their spending habits. A credit card can often be seen as money in the bank and the money can be spent on unnecessary items.

The problem has had a great impact on some students who are even forced to drop out of school when they are unable to pay their debts. Ruining your credit early in life can be a harsh beginning to your career and the climb back to financial stability will be a harsh one.

Debt

To make a student credit card become useful and to let it work in your favor, there are several things to keep in mind. Taking a personal finance course at school can help you learn in-depth about how to manage your money better. You can also consult a non-profit credit counseling service if your credit card debt burden is growing. Avoid using your student credit card to pay your college tuitions, using cheaper student loans instead, and use the card only for necessary items.