Do credit cards and students mix?

What are the ups and downs of credit card?

09:03 14 September 2013

If you are a full time university student without any source of regular income yet, having a credit card seems impractical.  Why, because as long as you use your credit card, there will be a certain payment due date whereas your financial source may not be as certain and if it does come, it will be allotted for very specific and basic needs generally related to student needs.

Be that as it may, student credit cards could still present some advantages, especially if the young individual has an excellent sense of responsibility and self-discipline.  Just like regular credit cards, payment can be deferred without interest so you get to save up for the payment.  The student can also take advantage of exclusive discounts offered by the card.  Purchases above £100 are protected by the Consumer Credit Act so that your money can be refunded if something goes wrong with the purchased item.  Using the credit card can be a good start for the student to learn the good habit of being a responsible consumer and a prompt payer which can immediately give you a good credit rating after graduation.

The downsides of using a credit card are, just like in a regular credit card, if you don’t pay your purchases in full, you will incur interest charges so it will be preposterous to use it for long term credit.  Most student credit cards do not allow 0% interest on instalment purchases.  Additionally, the required minimum payments are higher than the standard credit cards.

Paying in cash is still the best way to go.  You can look into benefits of using prepaid cards which you can preload the used like a credit card to pay for purchases including online purchases.

If you are really in need of extra cash while at the university, check out the student loan offered by the university.  You can also consider borrowing from your student bank account, which can provide you 0% interest on your overdraft. The amount of overdraft allowed increases each college year.