Students: Should You Sign up for that First Charge Card?

If you're a college student and over 18 old age of age, you'll soon be encountering your first chance to subscribe up for your ain credit card. A number of credit companies will be vying for your business from tabular arrays put up in outstanding topographic points on campus, offering Frisbees, T-shirts, and other inducements to get you to subscribe up. But it's something you should believe carefully about before you do.

Why make credit card companies make that? College students are notoriously poor most of the time, aren't they, and since they generally don't have got jobs, aren't college students considered risky campaigners for credit cards? Why would credit companies take a opportunity on them? And even give them dainties to lure them to subscribe up?

Interestingly, research have shown that college students actually are good credit risks, and more than importantly, students who get a card while in school be given to stay loyal to the first credit card they received. That agency long-term repeat business, and profits, for the company that was willing to take a opportunity on them during their college days.

There are advantages to having a credit card, of course. The first is that prudent usage of a card can assist construct a credit history at an early age, which will assist you later on, when you apply for a car loan, future student loans, and even your first home. A good credit history can even give you the edge over other campaigners when it come ups to getting a job.

A credit card can also offer a certain grade of security in lawsuit of emergencies, when you simply don't have got the money to turn to the situation. Carrying a credit card also reduces the need for carrying cash or checks.

But there's a downside to credit cards, too. The most obvious is the possibility of getting into debt beyond your ability to repay. You'll be required to do a minimum payment each month, which usually amounts to 2 percent of your sum balance. That may not sound like much, but if you have got a $500 balance at 13 percent, it'll take you 69 calendar months to pay off the balance if you do only the minimum required payment. That's a long-term commitment, and do purchases VERY expensive by the clip they're finally paid off.

As a student, out on your ain for the first time, the promise of a charge card can be very tempting. It will be easy to obtain, but a charge card can be hard to manage if not used wisely. Once you have got a charge card, you'll be tempted to utilize it for things other than emergencies, which can snowball out of control, with annihilating results.

So before you subscribe up at the credit card tabular array in the Memorial Union, inquire yourself if you really need one, and how you'll pay every month. Also do certain the card have a low interest rate, no annual fees, and a sensible saving grace time period before you'll be charged late fees. Then, if you bash make up one's mind to subscribe up, usage the card responsibly. Credit can travel you in a positive direction toward your long-term financial wellness as the old age travel by.

Copyright © Jeanette J. Fisher