Why a Credit Card isn’t Such a Bad Idea for Students

Most students dismiss the idea of applying for a credit card. After all, with a ton of student debt around your neck, the last thing you need is more debt weighing you down. But, as crazy as it might seem, a credit card could actually save your bacon and be a valuable tool in your personal finance arsenal.

Credit cards can offer several distinct advantages to students. The only caveat is that you are sensible with your spending and you don’t treat your credit card as a bottomless source of ready cash because we both know how that one ends.

Choose the Right Credit Card

So long as you select the right credit card, you can make your money work harder. The best deal for a student is a specialist student credit card. These cards are designed for people with little or no credit history; people like you who are at college and aged between 18 and 21. Don’t expect a huge spending limit if this is your first card. Credit card companies are not that stupid. Keep an eye out online for the best credit card offers if you want to find one that suits your needs.
Student credit cards charge a higher rate of interest and you may need a parent or other adult to co-sign the credit agreement as a guarantor, but a credit card is always a useful tool to have. To begin with, treat your credit card with the respect it deserves. Now is not the time to go crazy in the Apple store. Sure, you may dream of owning a new MacBook Pro, but unless it’s a compulsory purchase for your college course, try saving up instead.

Great for Emergencies

Credit cards are there for emergencies. By emergency, we mean such times when you are stuck in the middle of nowhere with zero cash and you need a train ride home. A credit card can save you from a long walk or a risky hitch. A credit card is also very useful if you decide to go traveling. If the worst happens and your wallet is lost or stolen, you can replace a credit card whereas you can’t replace lost or stolen cash. For that reason alone, it is always sensible to take a credit card on your travels.

Using a Card Abroad

If you do plan on using a credit card abroad, shop around for one that doesn’t charge a currency exchange fee. Some card providers do, which makes using the card very expensive.
Some student credit cards offer rewards and incentives for careful spending and sensible management. Rewards schemes are worth looking out for, especially if you can earn air miles or loyalty points for any spending you do on your credit card.
Take advantage of any budgeting tools offered by your credit card company. Online budgeting tools and apps will help you manage your money better and let you see where you could make savings.

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