The good and the bad with student credit cards
Finances can be very tight for students, as anyone who has ever had to cope on a student budget will know. This is why many students decide to turn to credit cards, so that they have some form of financial backup and have a flexible and convenient means of making payment for purchases. There are many benefits to students getting a credit card whilst they are still young and at university but there are also some risks attached for students who fail to prioritize when it comes to making repayments on their credit cards.
By getting a credit card whilst still at university, students are able to take the very important step of building up their credit, which is vital for those that want to be able to get access to competitive finance such as car finance, mortgages and loans when they leave university and step out into the big wide world. It also enables them to build a relationship with a bank or financial institution ready for when they start working after university and will require banking and financial services.
However, officials have pointed out that there is also another side to students having a credit card. With a credit card at their disposal many students who are inexperienced with financial management could quickly find themselves getting into an unmanageable level of debt, which they will then struggle to repay. Many students may also find that they struggle to make payments on time, which could negatively impact their credit for the future.
One industry official said: “Credit cards can come in very useful for students and when used and repaid properly they can help students to enjoy a better financial future. However, failure to use and repay these cards properly could lead to students struggling to get affordable finance in the future, which could mean problems when getting anything from another credit card to a car or mortgage.”
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