Why Are Credit Cards Bad For College Students

You may use your credit card for 200 concert tickets and if you only pay the minimum and allow interest to build up you could be paying more than double for that concert ticket. If managing money is an ongoing challenge for you getting a credit card in college probably isnt a good idea.

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The first thing you can Possibility get from a college credit card is a Bad Credit Score and as you all know that bad credit score can take some of your time to improvement.

Why are credit cards bad for college students. Credit cards for students with bad credit make it possible to build positive credit history at a low cost. Many college campuses are filled with banks and credit card vendors giving away gifts for signing up and otherwise making it very easy to do. Interest annual fees late penalties and similar charges can quickly add up.

In general I recommend that college students do in fact get a credit card but only if it has a very low credit limit of 500 says JP Geisbauer a certified financial planner and certified public accountant with Centerpoint Financial Management. They pay little attention to interest rates terms and card features. Very few student credit cards accept applicants with bad credit scores usually requiring limited credit or better for approval.

Student credit cards are particularly forgiving of thin credit profiles making them fairly easy to obtain when you have a limited or nonexistent credit history. Credit card companies pay to sell credit cards to students because theyre banking on students making up for it in interest charges and fees. If you fail to make payments on time and defaults on loans and your credit score can be irreparably harmed thus restricting the major economic decisions you can make.

Credit card companies sometimes target college students because of their financial ignorance. Thats a problem because a credit card can be a great tool to help build credit. Should a College Student Get a Credit Card.

A credit card can be a safety net in case of large unexpected expenses such as a costly car repair. Although not strictly for people with poor credit student-focused credit cards often have more flexible credit score requirements than other prime credit cards. Interest rates and fees are associated with credit cards so the companies can get as much money as possible.

Credit cards can tempt you to spend more than you can afford. The Marketing Tactics of Credit Card Companies Credit card companies truly understand the college demographic. If you ever shop online a credit card offers stronger fraud protection than a debit card limiting your liability to 50.

If youre relying on student loans for any part of your college expenses then avoid adding to your burden with credit cards. And keep in mind that card companies are targeting college students for a reason - David Laibson of Harvard did a study showing that new credit card users eat most of the fees. If your credit card balance climbs too high it could damage the very credit score youre trying to establish.

But if a student lacks discipline isnt responsible and doesnt have a job they should not. Factors such as a short credit history and high debt can make it tough to qualify for a credit card. Getting a credit card while youre in college is a good idea for a couple of reasons.

Young people who have no experience with making a budget or managing debt may be unaware of how quickly a small credit card charge can snowball into a large balance. Credit cards are often seen as free money and that couldnt be further from the truth. Bad spending habits today can lead to long-term negative consequences.

The real problem is that this will be the first credit card they encounter for many of these students. When it comes to credit college students often find themselves at a disadvantage. Debt is the 1 problem facing college students and graduates these days and they should not be adding to their debt burden with credit cards.

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