Student Credit Cards Can Be A Great Teaching Tool

Students who find themselves living away from home for the first time in their lives can often benefit from student credit cards which are specifically designed to help students deal with a cash flow crunch. Student credit cards can also help a student begin to establish a credit history. Parents can use the opening of a student credit card account as a great way to teach their child about credit and what responsible credit card use means.

Because student credit cards often have very high interest rates, it is important for the card holder to get into the habit of paying the balance off in full at the end of each month. This habit will go a long way toward teaching a student about how to manage their plastic money and the responsibilities involved with doing so.

A student with student credit cards can find them to be a lifesaver for times when they might be running a bit short on cash but if they are not used wisely, the student can find that they are soon drowning in debt. You will want to instruct your child on how to appropriately use a credit card and when not to use a credit card and do without something they may wish to have.

You will want to teach any student who is using student credit cards to not use their card for everyday purchases. They should be taught that using a credit card is only for an emergency and only if they know they will be able to cover the bill in full when it arrives in about thirty days.

Helping your student with credit cards learn the difference between a need and a want can put them in a position to have a healthy financial life for many years to come. All too often, young people are used to instant gratification and moving away from home and being thrust into a situation where they are suddenly responsible for their own expenses can be a difficult time. They will need to learn to exercise caution when making purchases and learn to purchase only things that they truly need as opposed to anything they might simply want.

Student credit cards should ideally come with a low interest rate but they almost always do not. When searching for a credit card for a student do not be dazzled by a card that offers a high number of incentive rewards because they will almost certainly come with a high interest rate as well. Stay away from cards that have terrific introductory offers as well because these always come with a price, usually one that is higher than your student will want to pay over time.

Students using credit cards should be taught to use their credit card like a debit card. If they do online banking they should be encouraged to come home after making a payment and immediately transfer money from their checking account to their credit card account. This way they will not allow a high balance to accrue that they may not be able to pay in full at the end of the month.