Whether one likes it or not, the fact is that credit cards are slowly and surely becoming indispensable parts of modern lives. The convenience that a credit card provides is making them really invaluable in making purchases and availing of the other benefits they provide. Surely then, students would not like to be much away from the lure of the credit cards. Today student credits are becoming almost as popular as the credit cards meant for adults.
Student credit cards can be used in much the same way as the adult credit cards can, but there are certain restrictions. For student credit cards, a parent or a guardian generally needs to cosign. This is to ensure there is backup in case the student is not able to meet up with the payments. The limits on these cards are also lower than on adult cards. Student credit cards seldom go beyond credit limits of $500 to $1000. In addition, student credit cards have higher rates of interest for two reasons: 1) because students may not be able to pay off their bills and 2) students do not have any credit ratings to show.
However, there are many plus points to student credit cards. One of the most important ones is that students can learn finance management from a very young age. Parents must encourage their children to become wholly responsible for the payments on their credit cards. This ensures that the student would grow up to manage his/her incomes better. Another thing is that the student would be able to build up a credit record from a very young age. Of course this would depend on how efficiently the student manages to make his/her payments on the credit card in time.
The best thing a student can do is to make a budget in the beginning of the month. This should take into account how much the student can afford to spend on the credit card. Making a realistic budget and then sticking to it will make the credit card a very efficient tool in the hands of the student.
It is not necessary to be intimidated of student credit cards and to reject them for that reason. On the contrary, the best thing is to buy the card and then make proper efforts to make the payments. In this way, the student will always have money to get what he/she wants, like a movie or a concert ticket, a new pair of jeans, or even a new cell phone. Treating the card with respect from the student age could be a major leap in learning how to live with financial independence in later life.