Why Students Should Get a Credit Card

Conventional wisdom says that “university students should keep one’s eyes off from credit cards”. the assumption is that young adults shouldn’t saddle themselves with high-interest debt – which is totally true. But credit cards may be a valuable financial tool when used responsibly.

College Students

Whether you’re living at home, renting your space or on campus, you would possibly consider getting a student credit card. having a credit card as early as college means you have the opportunity to build your credit history early. If you utilize your credit card responsibly, it may be a good way to build a credit history and establish a credit score at a young age. However, it’s important to remember of the potential pitfalls of student credit cards – if you max out credit card, regularly miss payments, or have zero income to repay the balance, it can damage your ability to qualify for loans for the years to come back. you do not want to end up paying for a fee to a credit specialist in Toronto like credit repair now for helping you fix your credit score.

Student Credit Cards

Canada’s big banks and smaller financial institutions offer student credit cards. These credit cards have similar features standard credit cards, including cash-back or reward points. Students typically do not have enough a credit history they’re often viewed by lenders as “high risk”. due to this, student credit cards may include higher interest rates and lower spending limits. Students are often bombarded with credit card offers on campus so it’s vital to require the time to Students often do not qualify for achieving standard income requirements for a better credit card. They even do not have the ability to save money on their own. Family members requires a careful review on the small print before allowing your child to apply. Carefully review or understand the potential costs like for example the annual fees and any other fees including the deposit if there is any.

Credit card can be a way to teach the students the importance of budgeting and responsible usage of credit card. As a parent , before your children or your son and daughter apply for a credit card, it is important to have a good conversation about how to become a responsible credit card owner. You have to explain the advantages and disadvantages of having a credit card. You have to ensure that they understand the fundamentals of credit card and they ought to only spend what they will afford to pay off fully every month.


As a parent, if your child is under 18 years old or lacks a credit history, you will be asked to co-sign. It’s advisable that you just keep the credit limit low until you’re confident your son or daughter can handle their credit card responsibly. It’s important to carefully review your child’s credit report on a monthly basis to make sure they’re using it responsibly..

Some credit card issuers don’t allow you to co-sign for student card applications. Instead, you’ll be able to add your son or daughter to your credit card as a licensed user. During this case it can add up to require out a separate low-limit credit card. Although authorized users receive their very own credit card , it’s the parent who’s accountable for all activity on the account. It’s important to notice that adding a licensed user to your account won’t allow them to make a credit history.

Benefits of Student Credit Cards

Creating and maintaining a good credit history at a young age is beneficial, as long as your child uses their credit card responsibly. Here are some of the benefits of student credit cards.

Credit Score: Building an honest credit history is very important, especially if you would like to eventually borrow money to buy a house or car. A student credit card can help create the muse of a credit score to assist qualify for a mortgage after graduation. However, if used irresponsibly it can take years to recover. similar to standard credit cards, you ought to aim to pay off your balance fully every month and keep your credit utilization below 35 percent of your available credit.

Rewards: Credit cards for students typically include rewards same as with standard credit cards. you’ll choose from cards that provide points towards cashback, gift cards, and trips just to call some. Some student credit cards also offer discounts at your favorite retailers.

Cash Flow: If you’re a student living on campus, your income will be tight, especially if you’re waiting until your paycheque comes in from your part-time job. Your student loan might not be enough to hide tuition, rent, food, textbooks, and transportation. It’s important to look at your balance carefully to make sure you’ll be able to pay off any charges fully to avoid costly interest.

Consumer Protection: Student credit cards typically offer identical consumer protection as standard credit cards. If you’re making a significant purchase sort of a new laptop, many credit cards offer extended warranties at no extra charge. If you’re traveling during respite, student credit cards also offer some insurance on rental cars and travel insurance

The Bottom Line

As long as your son or daughter uses their credit card responsibly, a student credit card can be an excellent way to build credit. As a parent, it’s important to take the time to teach your teen or adult child about credit cards. Signing our Financial Responsibility Pledge is an excellent way to get a commitment in writing to use credit cards responsibly. This will help make sure your teen or adult child is ready for a credit card when the time comes.

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