Pros & Cons of Credit Cards for Students

Although credit cards can set up students for a healthy financial future, they can also cause tremendous hardship if misused. To mitigate the negatives, many students opt for secured credit cards when applying for credit for the first time, because these cards have a fixed level of spending. Nonetheless, a traditional unsecured credit card, if used responsibly, can teach students how to be financially responsible.

Building Credit

When used responsibly, credit cards help students establish credit history and a good credit score, putting them in the position to qualify for low interest rates on mortgages and car loans.

Safety Net

Credit cards can provide a safety net for students when they have unexpected emergency expenses.

Financial Lessons

Credit cards can be a good opportunity for students to learn budgeting, bill-paying, and money-management skills.

Insufficient Income

Many students do not have enough income to pay their credit-card bills in full or on time.

Credit Cards for Daily Expenses

Because many students have low incomes, they may be tempted to pay for daily expenses such as gas and groceries with credit cards and amass large debts.

Irresponsible Use

Younger students may not have the willpower or financial savvy to use credit cards responsibly.

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