Student Credit Cards

Most students find that over the period of their higher education, their graduation debt can reach a high figure – purported to be around $25,000/£12,000 on average, many turn to credit cards to help them out over this time.

Numerous credit card companies target those in higher education and student credit cards are easily obtainable to those who do not have a regular, minimum income and lack of credit history. Added incentives such as low interest rates for a certain time, free CDs, shopping discount vouchers and so on are usually offered to Students.

Student credit cards will naturally carry a higher interest rate in comparison to standard credit cards due to the higher risks involved. The reason that credit card providers are willing to offer credit cards to students is that they are well aware that once they have graduated – they tend to earn well over the national average wage. Therefore, they are quite happy to take the risk; many gamble that the probability of the student staying with a particular credit card provider once they have graduated is pretty high.

As we all know and are well aware of! These financial institutions and credit card providers are not in the business for love, they are in it to make money. Whilst they will make their opening offers very attractive with low or zero introductory interest rates, money off vouchers and so on, if you fail to pay off your credit card balance in full every month, the financial penalties you will receive could far out weigh these opening offers in the beginning!

The most important thing when looking for a credit card that will be suitable for students is to do some research. Don’t be lulled into a false sense of security by accepting a credit card from your bank as they will not necessarily offer you the best deal. Shopping around will benefit you more in the long run and could well save you money and hassle.

Even though these cards are expressly intended to attract students, it is well worth taking some time to weigh them against the industry standard credit cards. Some of the standard credit cards will approve an application to someone who is only on a low income, i.e. earnings from a part time job – which many students do during the holidays and sometimes during term time when not attending lectures.

On condition that you don’t forget that spending using a credit card is in effect debt and that if it is not managed properly - it can spiral out of control. Many people use their “plastic” and don’t see it as real hard cash, that’s a big mistake because it is money and it has to be paid eventually!

By making sure that you budget your finances properly so that you will be able to afford the monthly repayments along with any other expenditure such as tuition fees etc, you won’t go far wrong. Failure to do this could end up costing you dearly – resulting in a bad credit history which could as a consequence, badly affect future credit applications.