The pros and cons of student credit cards

Student credit cards can be a great introduction to financial responsibility for college students, but all too often, students let their spending get out of control and, instead of building good credit, end up settled with large amounts of debt by graduation. Before applying for a student credit card, you should take some time to research the pros and cons and decide if one is really the best choice for you.

The foremost benefit of a student credit card is that it is a chance to build a positive credit history, which will impact future purchases, such as cars and homes, and even influence one's ability to get certain jobs. Since credit card companies know that the college years are the first time when many people will have a credit card, they may offer attractive introductory rates, such as 0 percent APR, which can also be a plus. Credit cards are the easiest way to shop online, which makes it easy to order textbooks, and furnish rooms or dorms for cheaper than you could by shopping at a store. Finally, cards are safer than cash, since they are replaceable, and if they are lost or stolen, you are not responsible for the charges made to your card.

Student credit cards also carry with them a variety of negative aspects. This should not necessarily dissuade you from getting a credit card during college, but they are things to keep in mind while comparing different cards. One major flaw with student credit cards is that, often, the attractive introductory rates and terms only last for the first year. Make sure to read through the terms and conditions of a card carefully, since credit card companies are allowed to change certain rates and fees over time. Also, sometimes, the lack of an APR with certain credit cards can be offset by steep interest on unpaid balances: in some cases, as high as 21 percent.

Just because you have a credit card does not mean that you should spend money you don't have. If you spend more than you are able to pay, you will be charged interest on unpaid balance, as stated above, and over time, this interest can practically double the cost of some items. Without plenty of discipline in spending, you can easily find yourself winding up in debt, and unable to get another credit card.

-Seth Berger