Should Students Have Credit Cards?

By Stephen Fisherton on July 12, 2012

Credit cards are a very valuable financial tool, but they’re not for everyone. In fact, most people who get a credit card early tend to run into trouble with high-interest credit card debt. Let’s explore whether or not college students should get a credit card.

Pros

Credit cards are convenient and pay you to use them with cash back benefits and rewards structures. Also, credit cards allow someone to go shopping or pay bills without lugging around a wad of cash or checkbook in their purse or wallet. Finally, credit cards give students the opportunity to build up their credit reports and scores to borrow in the future.

Cons

Credit cards can become very expensive if they are not paid off quickly and reliably. Also, a credit card can hurt your credit score if you mismanage your finance, miss a payment, or carry balances that are much too high relative to your credit limit. How you use your first credit card will affect your score for as long as seven years – the time it takes for items to fall off your credit history.

The bottom line

A credit card is only a tool if used properly. When used improperly, a credit card can be a disaster. For those who can realistically understand and use a credit card only as a tool of convenience, a credit card is a great financial product to have. Those who are concerned about spending too much might instead want to look for a debit card or prepaid credit card, so as to build credit without risking a large credit card debt due to overspending.

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