The Downsides Of Student Credit Cards

Student credit cards can seem like a great idea especially if your adult child is at school far away from home and in need of cash fast. That middle of the night call asking you to provide your credit card so that their car can get towed back to campus is not only unnerving but expensive. Wouldn't it be better to give your student a student credit card? Well, a student credit card can be a great option but it also can become a snare if you ignore its downsides. Read on and we'll take a look at what to be aware of before applying for a student credit card.

Most student credit cards come with high interest rate charges and some require an annual fee. Shop around as there are plenty of offers out there; you don't need to go with the first offer you see and avoid that annual fee by selecting a card that does not charge one.

When selecting a student credit card, make sure your adult child uses the card only for its intended purposes such as buying books, paying for clothing, and for emergencies. Instruct your young cardholder to not take out cash advances or to buy her sorority's pizza party with the card!

Some card offers are too good to be true, therefore reading the fine print with your adult child can reveal what is involved when selecting a credit card. Avoid the high interest charges, annual fees, application fees, etc. Make certain he or she understands when payments are to be made and to where. If you are concerned about how your student will manage his or her own card, offer to have statements sent to your home. This is a good idea anyway as bills have a tendency of arriving on campus during winter and summer breaks! Even better: share joint access to the statement online where you can review their credit card bill thousands of miles apart.

On the other hand, a student credit card is an excellent way for your adult child to build up some credit. By regularly charging items and paying of the bill every month your student's credit starts to gain traction and by the time they are out of college they should have a healthy credit score provided they were careful how they used their card. This can work to their advantage especially when buying their first car, a home, or other significant purchase.