College Student Credit Cards – The Ins and Outs
College is where many of us get to enjoy our first taste of freedom and living pretty much in the manner that we desire. Along with this newly found independence, comes financial freedom and responsibility. Because of this, many new college students today are in the marketplace for college student credit cards. Students see all the enticing college credit cards available with all of the unique rewards, points and cash back offers available sound so great and many students do not know exactly which way to turn. And unfortunately, many students decide to apply and begin using college credit cards anyway, and for all the wrong reasons. Students start by using these cards to live above their means with frivolous purchases (pizza and beer), and then graduate to purchasing expensive items for their dorm rooms just to impress their peers and so on and so forth.
College students receive advertisements and even applications from credit card companies for college student credit cards in the mail, their email inboxes, in their new textbooks at college book stores and even in the college newspapers. Many of these are stamped with the very enticing words “Pre-approved”. Since these gimmicks are so appealing, students are more than willing to apply for these types of college student credit cards. Some credit card companies such as MBNA even offer credit cards for specific students such as those belonging to a certain club or alumni association. A college credit card can be beneficial, but only if the college students remember to read the fine print. These cards may sound very appealing, but they are credit cards and they all have a downside.
Many companies that offer college student credit cards understand the majority of college students only pay the minimum monthly payment and incur late fees and of course interest fees on their balance. This can begin to add up quite a bit of profit for the credit card company. The reason they offer cash back is to entice students to pay off their balance in order to receive cash back, however the interest rates and fees on these type of college student credit cards is normally very expensive. To get college students to apply for this type of card, they offer all kinds of incentives including a low interest rate as an introductory special. But the majority of the time the interest charges can accumulate and can end up being costly.
But the most important thing to remember is that if the student does not pay attention to his or her spending with college student credit cards he can seriously damage his credit. Once their credit rating is damaged they may be turned down for employment, purchasing a new car, or even a loan to purchase a home.
Learning how to read and understand the terms and conditions of college student credit cards is one of the most important things students should do prior to applying for a college credit card.