Credit Card Woes for Students

by : Andy Adams



Many of us will either have been to university ourselves or know someone who has, they've opted to continue learning in hope of attaining better career prospects. This is a good move since the cost of living is on the increase and in the future we are likely to need higher paid jobs in order to run a car, own a house and still have some money left over for our free time.

The trouble with education is that it is expensive; with course fees and accommodation it is certainly uncommon for students these days to not have a student loan of some sort. Whilst this is all well and good and offers the best interest and repayment rate many people find that the ?3,000-4,000 loan does little to cover all the costs of being a student. Many students will look elsewhere to get some money; one of the most popular options is to take out a credit card.

Whilst Credit cards can be used as a quick way of getting a sum money it is unadvisable to treat it as a never ending supply especially if you have no source of income during your studies (working at a bar etc.). If you treat a credit card as your personal piggy bank then you will quickly find that you'll not only have to pay all the spending back but also with interest which can be the killer in these situations.

Whilst you may hear many horror stories about people getting themselves into unmanageable debt before they're even 25 there is a large group of people who are able to enjoy student life whilst maintaining a stable financial position. These are typically the people who use their credit cards for emergency only. What constitutes an emergency for a student? The fridge is running low on beer? The rent is due? You only have two pot noodles to last the week? Well in most cases it is the essentials such as food and rent and so students will opt to pay using a credit card since their other finances will be tied up or simply gone until the next loan cheque.

There are many attractive offers on credit cards for students and it can be all too easy to go with the company that offers you one first, if you find that you need a credit card and have reviewed the implications and believe you will be able to spend responsibly with the card then you can begin to look into getting your first credit card.

When looking to get a credit card you should review all the details, how much will you have to pay per month? How often you should repay the debts as well as knowing all the charges that you'll incur for using it. Whilst it's always advisable to pay off your credit cards each month this may not always be possible. What you need to be careful of is that if you do not pay off the entire amount each month then this will reflect badly on your credit rating.

This may not concern you now, but remember, in the future you may want to buy a house means you may need a credit check for products like mortgages or loans. Credit cards shouldn't be seen as a quick fix for financial problems and treated with care when spending.

A 2004 study conducted in America showed 91% of college students had their own credit card, a massive percentage showing that almost all students rely on credit cards but also the same study showed that 56% of these card owners also had four or more cards totalling $7,000 by the time they graduated. This kind of situation is not likely to look good on a credit report and should be considered when considering credit cards.