The Benefits of Student Credit Cards
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by: barrywaters
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Word Count: 430
Good credit is one of the most important things a student needs to make their entrance into adulthood after graduation, and student credit cards can help young adults establish a good credit record while still in school. A good credit records goes a long way when that student rents an apartment or purchases a new car, and may even help obtain a more favorable insurance premium.
Good credit management is a lifelong skill best developed early on rather than when it is too late. If used properly, student credit cards can be an excellent teaching tool. By allowing your young adult to have a student credit card, he or she can learn how to budget by having to set aside money each month to pay the bill. The student will also learn about interest and how it and late fees can build up if bills remain unpaid.
Astute parents of a college age child will set limits on how their child can use a student credit card. The first limitation should be on the credit limit to discourage binge spending and develop responsible spending habits. Once away at school, the student will learn quickly that it is wiser to use a credit card for necessary purchases such as books and school supplies rather than blow the entire credit limit on new clothes or a weekend trip. The credit limit issue can be revisited and perhaps revised once the student has demonstrated responsible credit behavior and developed good payment habits. Students should also be introduced to the concept of online student credit card payments. Since our society grows more technology driven by the day, all bill payments will eventually be made online and students should be prepared for that. The most desirable student credit card package will have no annual fee, zero percent introductory interest rate and cash back rewards to reinforce good credit practices.
There is no reason for parents to be leery of introducing their college age children to student credit cards. In reality, they would be doing their children a great disservice by shielding them from the reality of financial responsibility. Children need basic financial management skills and a good credit history in order to succeed in our financially driven world. Insurance companies, financial institutions, landlords and employers all use credit scores to determine whether an individual would make a good credit risk. Give your child the gift of a sound financial education before it is time for them to go out into the world on their own.
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More information on credit cards, stop by getsmart.com/credit-cards.
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