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Students and Credit Cards

Student credit cards are often needed by the students who can least afford to have them and by those who should most avoid them. The students that most need credit cards are those who have gotten into college but don't have the ready capital to spend on books, travel to and from work, home, and school, or medical surprises. But this doesn't discount a credit card for a student all together. A credit card can help build needed credit for when the student enters the job market, starts a family and begins looking for a home.

Students today may use credit cards to pay for more than emergency fund items like utility bills, car repairs, or occasional shortfalls in living expenses. Unless the credit card has a conservative limit in tune with the student's personal ability to pay it off, continue looking for a better deal in the forms of other credit.

Students argue they need to learn to manage their financial affairs, including credit cards. Indeed, credit card companies initially used just this rationale to advertise for applicants for student credit card accounts. Occasional bills and sometime extraneous expenses have become passe, it's the big ticket flashy expenses finance companies want to market to potential student clients now. With times so economically depressed and belts tightened and spending stringent in every area, the idea of an unlimited method to obtain goods and services has an almost celluloid value. Credit cards can impact future ability to refinance student loans debt as well, so be careful with how you use your credit card.

But if a student is using a credit facility to pay for items like utilities or food they cannot afford without credit, it is likely that student cannot afford to be in college and should be using wages from employment to pay living expenses. Most students entering college have never lived on a budget, never worked a full-time job, never met anything near the expenses of even freshman year cash expenses, and they can expect bigger expenses every year after. Any debt taken on in addition to student loans and wages earned during school will costs a student much more than the cash value of anything he takes home or experiences for the money.

But as recent years have shown, as long as there is a credit resource to tap, individuals will irresponsibly apply for and utilize that resource for their own purposes. Only students who really don't need the credit cards can afford to shop around or wait for a beneficial low rate. But even these careful spenders will sooner or later answer the gap in their lifestyle with the flexibility in their spending power a credit card gives the perception of. And should this cycle of spending overtake the ability of the student borrower to repay these charges, a costly debt effect begins to build.

A student with a clean and established credit record should avoid appying for any credit card resource they don't need. Student credit cards should be defined as for emergency resources. Student credit should be used for for school related expenses financial aid does not cover or cash requirements for books, course materials, transportation or bills that cannot be deferred any other way. Merchant accounts for student credit should be avoided as their merchandise price points are usually very high respective to the student's credit limit, which will shortly go up to secure further expenditures.

If a student does get caught in a credit bind, look for a credit card that builds up payment rewards or cash spending, frequent flyer miles or some other incentive to particpate in that student credit program. If parents see the student cannot pay off the credit card debt, they can transfer the balance to their own credit card and re-transfer it back to the student after graduation.This keeps the student's credit record clean in case they don't qualify for student aid and have to apply for commercial financial aid student loans. Otherwise credit analysts granting the guaranteed student loans may deny the loan after reviewing the student's sizable amount of credit debt already on file.