Do you have a credit card? Did you get a credit card in college?
For some reason that piece of plastic can have a huge impact on your future.
We all know the same credit card story…
Someone gets a credit card in college. They don’t know how to use it. They buy drinks for everyone. They get into debt and their life is ruined forever.
I hate this story!
What’s the shocking truth about student credit cards?
They are not evil. They can be helpful. You build your credit at an early age and be forced to practise smart credit card use.
I promote student credit cards because I believe in them. I also know that you’re smarter than that. Not every single student that gets a credit card will go into debt and be screwed forever.
Credit cards obviously aren’t perfect.
There are many student credit card solutions that could be introduced. I personally believe that you should have money in your checking and savings account. You should be forced to prove that you have money to pay off your balance.
I’m happy about the new credit card laws. Not just every single person on campus can get a credit card with their free frisbee. You have to be a certain age, prove that you have an income, or get a co-signor (good luck!).
Community member Sandra wrote in to that post on credit card solutions with:
I was a student based in Ireland, and you had to prove that you had an income before anyone would give you a credit card. There were times when I really needed to buy something online, maybe a flight, or piece of tech, and without a credit card this was unnecessarily difficult! I had the cash on hand, but not the magic piece of plastic. I managed by giving relatives cash and having them make the purchase for me (kind of embarrassing), or loading up a pre-paid credit card with extortionate fees.
Not everyone is going to use their plastic to buy drinks they can’t afford.
Now let’s see if student credit cards are good for everyone…
I also once asked if you thought student credit cards were good or bad? The responses surprised me.
Daniel wrote in with:
I feel like people’s viewpoint on this topic is so anti-credit cards, which proven by this post is ignorant. In order to have good interest rates on future loans (which are inevitable for a mortgage unless you plan on hitting the lottery or have a brilliant business plan), you must build your credit.
Long time reader Kirk chimed in with:
I agree that it’s unfair to assume all college students are irresponsible. You can’t make an argument against credit cards just because the people using them might be irresponsible. At 20 years old, you are an adult and should be treated as an adult. Credit cards are very valuable tools that I think everybody should learn to use.
Doctor S had a different tune:
A credit card in college should only be used to pay for emergency items. Books when you don’t have cash, medical supplies when you notice something wrong with yourself and don’t want to tell anyone, or food when you run out of meal money on your school card.
I think there obviously more cons than pros to having a credit card in college because you can’t just tell them that you’re only going to give you this card if they act responsibly. 6 months later the kid has maxed out their $500 balance and not yet made a payment.
If you can get by through college solely on paying with cash and a debt/checking card, then do that. Master paying with cash before moving to credit cards.
What do you think? The responses ranged from good to bad.
If you know anyone that’s in debt, I put together a huge piece on crushing debt.
What do you think about student credit cards? Would you recommend them to a younger person in your life?