Understanding the Benefits and Dangers of a Student Credit Card

The prospect of putting a student credit card in the hands of your high school or college student son or daughter may be enough to send shivers up your spine or cause you to lose significant amounts of sleep at night. But it does not need to be that way, as long as you are aware of both the benefits and the dangers of a student credit card.

With the rapid pace of extra curricular activities in both high school and college these days, as well as the never ending request for additional things like lab fees, computer fees, locker fees, and more, the benefit of having a student credit card should be obvious. This is particularly true since most students these days have not yet learned to plan ahead, which is evidenced by the probably too frequent breakfast discussions where you hear (for the first time) about this certain fee is that is due TODAY and can you write a check right now.

If your son or daughter had a student credit card, this would eliminate many of these last minute problems. The additional benefit is that you will see the credit card statement every month and be able to see where the charges on the credit card originate and what your student is using the card for.

Look at this as a life experience for your high school or college son or daughter. While they may view the credit card as “free money”, this is your opportunity to let them know in no uncertain terms that there is absolutely nothing “free” about it. In reality, they are simply “renting money” and there is going to be an interest charge associated with that if it is not paid back by the end of the month. This is something that is not taught or at least not stressed nearly enough in today’s world of academics, and it can be your chance to teach your son or daughter about the realities of credit. They will be using credit for the rest of their lives, so if you will view this as a learning experience for them in the PROPER use of their student credit cards, it will be a benefit to both of you.

There are a multitude of companies out there who are willing to give your son or daughter a student credit card. Do not be alarmed at the interest rate, which is probably going to be much higher than the interest rate that you have on your credit cards. Consider that the card issuer is taking a risk on issuing a credit card to them, and that level of risk is directly reflected in the interest rate.

The learning experience comes in when your son or daughter decides to fund dinner for their friends at a restaurant, and then discovers the balance on their credit card at the end of the month is several hundred dollars. You need to make it clear to them that this is THEIR responsibility, so they may need to cut the grass more often, get some extra babysitting time in, work more hours at that part time job, or whatever. This is going to be hard for you, since you will want to rescue them from the phone calls and nasty letters from the card issuer, but don’t do it. This is part of the learning experience, and if they don’t want those calls or letters, then they need to use the student credit card wisely, and plan ahead for how they will pay the balance at the end of the month.

The benefits are great, since this is a life experience lesson that will last them the rest of their lives, and with responsible usage of their student credit card, they will also establish credit with the credit bureaus. You need to explain to them that having credit established can be a good thing, and with poor credit, it can also be a bad thing that they will need to get resolved.

For more insights and additional information about a Student Credit Card please visit our web site at www.student-credit-card-resources.com

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