I know I am going against most advice you’ll hear but I think you should apply for a credit card. There are lots of benefits, some of which I have already covered. With summer approaching and a lot more income coming for students, a lot more opportunities to spend that money will come along too.
To start off I must warn that you will only benefit from a credit card if you are responsible. There is a proper way to use a credit card. That way is to use it instead of cash, but only when you have the funds in your account to pay it off right away. I essentially view my credit card as a debit card. I use it if there is money in my account and don’t use it otherwise. I pay my credit card as soon as I am on a computer and can transfer the money to the credit card, but making sure you pay it off at the end of the month before the bill due is sufficient too. Make sure that if you apply for a credit card you do not see it as a bottomless pit of your own money. It is somebody else’s money and they are giving it to you hoping that you will give them more back. But if you are diligent and smart about it you never have to pay them a cent.
The first thing about applying for and using a credit card is that you will build credit. This is a kind of vague topic to most young people so they may not take the importance to heart.
I got my first taste of how important a credit rating is when I applied for another credit card. There were a lot of benefits to getting this card, but I got turned down because I did not have a long enough credit history. At the time I had only had my card and been using it for around 7 months.
The point is that if you ever want a bank to loan you money, like a mortgage let’s say, you should have proof that you can handle their money. That is how I see a credit score, a record for others’ to see if you can be trusted with their money. There are other components of and reasons for your credit rating, but like I said, they are vague to me.
A second is that if you ever want anything online you are going to need a credit card. I have found that a lot of the time if you shop around the best price you can find will be from a website.There are a lot of sites that can be found through Great Canadian Rebates that offer products cheap, and through Great Canadian Rebates you save even more. You can also make money for Amazon, a great online retailer from sites like Superpoints or Swag Bucks. But for the most part you will need a credit card to utilize savings online.
Third is that you will likely get the best deals you can on credit cards now, while you are a student. The card I got from my bank has no annual fee, something common to a lot of rewards credit cards. Student cards may also have lower interest rates, but this should not sway your opinion at all because you won’t be paying any interest, will you? Banks offer students good deals, either things for signing up or actual benefits of the card, in order to get your business. They assume (and are usually right) that students will be reckless and end up owing them a lot of money. But by being careful you can game their system a little bit in your favour.
Most people will tell you that you don’t need a credit card. That someone as young as you can’t handle it. They are wrong. apply for a credit card and then use it responsibly. You will be ahead of not only the people who misuse credit cards, but also those who don’t apply for and use credit cards. It seems counter intuitive but having a credit card will help you a lot.