When I first became a student, I really struggled with whether or not I wanted to get a credit card, or whether any student should have a credit card.
Having a credit card is a big responsibility, and for students perhaps even more so, because they are still learning the ropes financially.
Credit cards for students can be very dangerous. Money, through the use of credit cards, can be wasted on things like pizza and beer, instead of used responsibly, which would, of course, be unfortunate.
Credit Cards Build up Credit for Students
I think a credit card can be a powerful tool to better your financial position. There is no doubt that credit cards help the user build up credit. Since you are a student, there is likely not much of an opportunity for you to build credit as you go through school.
Having a credit card, if you use it responsibly and pay it off after each purchase or at the end of the month, can help students build up credit and start graduated life on the right foot.
Easier to Get into Debt
If you are anything like me, you are trying to graduate with either no debt or as little debt as possible.
Credit cards make it easier to get into debt, unfortunately. The debt on credit cards is high interest, so whether or not students should get a credit card depends on whether or not they can be responsible with that card.
You don’t want to graduate with student loans and credit card debt. Drowning financially is not a good way to start your life after you graduate.
Free Stuff With Rewards
My favorite part about having a credit card is the ability to get free stuff through rewards. I’ve blogged about cash back credit cards before, but there are also travel reward cards and other great rewards that you can get through using a credit card.
As a student there isn’t much extra money at the end of each month to put toward things like travel or generally enjoying yourself so sometimes the rewards that students can get from credit cards are really helpful. I have financed some vacations through my credit cards, and therefore they ended up being completely and utterly free, which was a great feeling. Though it does make you feel like you are cheating the system a bit!
You may just be looking for a “yes or no” answer to the question of whether or not students should get a credit card, but the thing is, I can’t answer that for you.
If you are financially responsible and will pay off your balance each month, then generally yes, these types of students should have a credit card.
If you are at all concerned about your ability to pay back your card or avoid going into debt with your card, then no, you shouldn’t get a credit card as a student.
I know that’s a wishy washy answer, but that is why personal finance is called “Personal finance” instead of “impersonal finance” – there are no blanket rules that will work for absolutely everybody.