Picking and Choosing Among Student Credit Cards

by : Ajeet Khurana

Can we trust college students to live within a budget? Would you trust your teenager with a credit card? Well, irrespective how you view the situation, students are increasingly being targeted by credit card companies. This is clearly the "catch 'em young" philosophy in action. There are many detractors to this policy of enticing youth to become credit cardholders. One of the most voiced opinions is that the credit card providers are simply only interested in making profits by exploiting the financial inexperience of young people. Teenagers are notorious for being reckless with their cash. In fact, most of us learn to take care of our finances only with experience and many cash crises.

However, perhaps it is time that we agreed that there is sense in the teenagers of the world. With the kind of exposure that the young people of today get, it is possible that they will not get entangled in webs of debt. Moreover, the high school and college years are the easiest years to realize what the value of money is. The experiences that we gain at this time teach us to use our money as well as we can. So this is a very good period to introduce your college-goer to the big bad world of credit cards.

Well, credit card companies seem to be sharing the same view. As a result, college campuses have become the marketplace for many providers. Students are snowed under by all sorts of credit cards from various credit card companies. Many of them offer freebies like t-shirts and caps to entice young financially unaware students. At times the offers might sound too good to be true. At such times, students must ensure that they are not taken in by great sales pitches. Make sure that you obtain a credit card that seems affordable. For instance, there is no point in going in for a card that offers and initial interest-free period but whose interest rates might be quite unaffordable. Ideally, one must look out for cards offering lower rates of interest, say about 16 percent. A card that has a grace period for payment might be a great deal for all the teenagers who might have a tendency to default on the payments.

Ultimately, what matters is not that your credit card is the cheapest on the market. What matters is how well the student makes use of it. A student who is able to budget for his expenses prudently would do well with credit card rewards. And one can always switch credit cards in between -- that's what all the credit card companies are encouraging you to do anyway.