Surviving a Student Credit Card on Campus
A student credit card can pretty much be a necessity these days. After all, it seems few people actual use or pay with cash anymore and having some cash in plastic is comforting in a safety way. Even so, student credit cards will not come without some risks. Then again, all types of credit cards come with some risk.
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You can think of a student credit card very similar to a loan. You are making purchases for goods and services with the promise that you will pay in cash for them at a later time, of course with interest attached. The cost of borrowing money from a bank or financial institution. A big difference between a student loan and student credit cards in terms of repayment are that a credit card required immediate monthly repayments while student loans are deferred until after graduation.
Advantages of Student Credit Cards
Student credit cards carry with them many advantages that will include helping you establish your young credit. Here are just a few of the rewards of using a student card.
Security Benefits
There will never be anything worse than laying down cash or using a debit card for a purchase to only be taken advantage of and have no way to get your money back. With a student credit card, your purchases are logged and documented with the credit card holding company. Each purchase will be detailed on your monthly statement. Should there be a problem, all you need to do is call the student credit card company and alert them to any and all bad charges or issues and officially dispute them. Most student credit card companies are also very prompt to alert you to any suspicious activity related to your student credit card account.
Emergency Fund Benefits
In life, you can only save so much money. Even if you do save and have really planned ahead, you may still find yourself short one month due to any number of unexpected expenses. Emergency car repairs, higher than normal utility bills, emergency travel, a death in the family which requires travel and expenses are just a few of many of the unexpected costs that could rob you of your precious cash cushion.
In any type of emergency, student credit cards can very much be a worthy and justifiable financial tool to have and use. It is important to remember that these increased charges will inflate total balance due on the student credit card bill.
When Student Credit Cards are a Necessity
While not all student credit cards are accepted everywhere, the majority of them will be, even in many foreign countries. If you do need to reserve a hotel, you must have a credit card of some kind. In fact, some hotels do not take debit cards unless the balance in your banking account is a certain percentage of the total amount to be due from the hotel stay. Hotels and debit cards do vary. If you want to shop online, you must have a credit card; reserve a rental car, you must have a credit card. Student credit cards are sometimes simply necessary.
Establishing a Solid Credit History
A student credit card can actually help many financially responsible college students establish and build a credit history. On campus, your immediate concerns should be grades, social life and finances. However, with a student credit card you have the very real opportunity to actually build a financial history, slowly. Remember, you do not have to go crazy with it; just a few purchases here or there on credit can keep your credit report fresh, alive, and good. Just make the payments on time and you should be just fine.
What are Credit Card Pitfalls?
Even though student credit cards carry with them many positives, they can also have their share of negatives, especially for college students with not much credit. However, most of these pitfalls can be dealt with by practicing responsible student credit card use. To mention one single pitfall to AVOID is “want spending.” Need spending is usually planned or simply needed purchases on items that are needed. “want spending” is spending money on an item because you want it, and it is usually not planned or budgeted.
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Student credit cards.com @ August 26, 2008