Saturday, 25 January 2014

Should students have a credit card?

This is a question which is being hotly debated on a number of parent forums online. The question of whether a university student should have a credit card is not an easy one to answer. Statistics indicate that the majority of 19 year olds can easily access a credit card when they open a student account.

Here are some things to consider if you or your child is considering a credit card.

Firstly, having a credit card is good, if it is used correctly. It can be a source of emergency money for a student who is away from home. It is also a necessary part of life and as such, the sooner a young person starts to build themselves a good credit record, the better it will be for them as they get older.

The downside however, is that credit cards provide a temptation to spend that many young people find it difficult to resist. Peer pressure and the temptation to buy those concert tickets or the latest jacket can render a credit card useless very quickly once it reaches its credit limit.

The best way to use a credit card is to understand that whatever you use it for in a month you will need to clear by the following month. This keeps the interest charges at a minimum and it helps to build the amount of credit on your card.

For students, this usually means relying on parents to help them with budgeting and on most occasions it is the parents who help out with the money for credit card bills. This is not always possible though, especially these days. Money is tight for everyone.

We aware, if yourchild runs up credit card debt you could be liable to pay the outstanding amount. It is a difficult lesson to learn, but learning how to deal with money and handle credit is a necessary part of life today. And the sooner a young person understands how it works, the better it will be for them.


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