Student Credit Cards
Student credit cards are given to the students by the credit card companies even though they have no credit history because they can charge the students a higher interest rate than their other clients.
They give the free credit cards to students because the colleges and universities they contact give them the names and addresses to them. The universities and colleges sell the list to the credit card companies.Student credit cards are very bad plan of the credit card companies. It is a trap for the students because the credit card companies encourage them to keep on using the credit card even if the student cannot pay for the money he has borrowed anymore. The credit card companies do not mind if the student cannot pay because they believe and are sure that the parents of the student will pay for the credit card bill.
If the parents do not pay, it is still not a problem because the student will just keep on paying for what he can afford even if it takes years to pay. This allows the credit card company to charge an interest and late charges that grows larger with every billing statement of the credit card debt.Student credit cards are a trap because the students in college need money and will do anything to have it. They will work or borrow when cash is short. While a student is walking on the college campus, he sees the advertisements for the credit cards on the bulletin board telling him to go and use a credit card to buy things using the card and pay for it later.
Student credit cards look like good deals because any student in college can qualify for one even though he cannot qualify for a regular credit card. This is because the student credit card requirements are different from that of a regular credit card. A student credit card entices students to get one by offering various treats for the applicant. For example, certain credit cards offer discount points that can be used in various places of entertainment like in restaurants or music stores. The credit card companies also say that there is an introductory zero percent Annual Percentage Rate, no annual fee, online, access, etc.
The credit card company makes it look cool to own and use a credit card. Once the student believes this idea, he is caught in a credit card trap.Student credit cards are a real trap for the students who do not know how to control their spending and read the fine print of the agreements they sign. Student credit card holders have to learn that even if you have a credit card for expenses, you should know how to practice smart spending. Student credit card debt sometimes costs as low as $2,700.
00 all the way up to $3,000.00 or even $7,000.00. This is because an average student sometimes has as many as three credit cards. Having this many credit cards makes the student feel like he can spend money and still is able to pay for it.
That is when he is trapped by “creeping indebtedness.”Student credit cards have some fine print agreements that the student does not read at the time he signs the application form and receives his first bill. This is part of the trap. The fine print sometimes says that the interest rates can change at the end of the introductory period, APR’s are fluctuating, you have to pay a minimum balance fee every month even if you do not use the card, and others. The students who do not know about these rules will fall into the credit card trap.
A student credit card should only be for those small emergency expenses usually needed in school. This is so that the amount due will always be something they can afford to pay. It is not for impulse spending. Once the student credit card is used without consideration for the amount payable in the future, a student can fall into the credit card trap and not get out of it until years later when he already has a regular job to pay it off.