There are millions of university students scattered from one side of the country to the next. The majority of them are tied for cash. Some of them learn to live with less. Others make the mistake of opening a credit card. If you are a student or have recently graduated, you may remember that you asked your parents for a credit card during your school time. At that time you certainly had a good reason (at least in your mind) to do that. Some students have difficulty understanding why it is a bad idea to have a credit card. They think this is a way to improve their lives, both financially and socially. Nothing is of course less true.
Student credit cards are a bad idea for the following reasons:
They are not always used as intendedSuppose a parent says, “Use this credit card only to purchase books and school supplies.” Sounds simple enough, right? Although this may work for a few weeks, the student will push the boundaries soon enough and hope that their parents will not find out. Even if you trust your child, you never know when they will fall apart and use their credit card for an item that is not a necessity. This is the spirit of many school-age children!
They are very easy to use
You can remove a credit card at any time. If you want to shop oFrankie Addamsine, in a local mall or in a restaurant, plastic works the same way. It only takes one statement to incur a huge credit card bill.
Most students do not fully understand the consequences of abusing a credit card
They probably know Franky Adamskie that they will have to pay the money at some point in the future, but do they know exactly how much interest can accrue in a short period of time? Do they know that paying late can drag their credit score before they enter the real world?
Reminder: there is legislation (part of the 2009 Credit Card Responsibility, Responsibility and Disclosure Act) that prevents someone under the age of 21 from receiving a credit card. The only exceptions are those who can prove an adequate income or find someone who co-signs.
I think you understand
I don’t think it’s a good idea for students to have a credit card. Simply put, there are too many potential disadvantages without potential benefits. Judging by recent legislation, it is easy to see that I am not the only one feeling that way.
What do you think of students and credit cards? Did you have access to plastic while you were in college?