Teenagers
and college and university students are
becoming increasingly common credit card
holders. They are a fast growing segment
of the population, and they have money
to spend, so they are often targeted with
various credit card offers by various
companies.
If
you are a teenager about to embark upon
a further education course away from home,
or if you are the parent or guardian of
such a person, you should realise that
obtaining a credit card at this relatively
young age can be a good idea, provided
the privilege of owning a credit card
is not abused. As long as any repayments
owed on the credit card are regularly
met, the card holder can begin to build
a positive credit record which will undoubtedly
prove to be useful later in life when
it comes to applying for further credit
cards, loans and mortgages.
Interest
rates and charges are generally higher
for student credit card holders than for
other customers. Small credit limits are
also common amongst student credit card
holders. Many credit card providers will
only issue students with credit cards
as long as they are secured; this is usually
done by agreement on behalf of the parents
to meet any outstanding repayments should
the student card holder be unable to make
them. For this reason it is important
that students who are obtaining credit
cards realise that they should only be
used for emergencies at this stage, until
they have a sufficient credit record allowing
them to obtain unsecured credit cards.
If high debts are accrued on the credit
card, and neither the card-holder nor
the guarantors (the card-holder’s
parents) can meet these debts, then everyone’s
credit rating will suffer as a result.
In
order to minimise this risk, consider
a voluntary limit of less than the company
will allow; this minimises the maximum
debt that can be made, and to a certain
extent ensures that the card will only
be used when it is absolutely necessary.
With
a little bit of personal financial management,
a deal can be an invaluable stepping stone
to a healthy credit rating later in life. |
Student
Credit Cards
Student Credit Cards