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Pros and Cons of Student Credit Cards

As a student, you might be wondering what exactly are the advantages and disadvantages of credit cards. You might be nervous about what it entails. Or you wish to earn some extra cashback or travel reward points.

There is always a correct usage and the wrong usage of a credit card. The proper usage of a credit card can give you an edge financially over your peers. Also, you can end up regretting it in the long run if it is used the wrong way.

It is essential you know the right way to use a credit card. will help you in making an informed decision about getting one or ignoring it.

You need to build a good credit history by ensuring you pay your bills on time. Your good history with the credit bureau can enhance your credit score. Likewise, you can become an authorized user on your parent’s account. It also can give you a good credit history without the stress of starting your account, and you can benefit from their excellent credit history.

Pros of Student’s Credit Card

The following are the advantages you will enjoy using a student credit card. They also serve as reasons credit card is so popular :

Build Credit

A good credit card score can be of help in so many ways- especially to a student. If you will like to open a utility account, take out a loan for a house, want to rent an apartment, or get a cell phone plan. A good credit card score can enhance the approval of your loan and can also determine the rate of interest.

Earn Rewards

Having a credit card as a student, you stand the chance of getting cashback rewards on your purchases and also travel rewards. Some credit cards offer 2% cashback and give you a 2% coupon on everything you buy. It can help you to buy things you might not otherwise be able to afford and also to take trips.

Enhances Your Consumer’s Protection

Compared to debit cards, checkbooks, and cash.  Credit cards offer more protection to their users. You will bear the consequences if anybody stole your debit card and drained your account.  In contrast, if anybody took your credit card details and used them, at the report, the charges can be removed.

Also, if your seller charges you the wrong amount on a purchase, you can report it to the credit card company, and it will be fixed immediately. It is not available on debit cards.

You May Read: Increase Your Credit Score with Authorized User Trendlines

Cons of Student’s Credit Card

The inability to manage your credit card account wisely can easily wipe out the advantages mentioned earlier. The following are the consequences if it is not managed well;

Getting Trapped In Debt

Using a credit card as a student can increase your chance of getting stuck in debt because of your low income. Generally, student credit cards don’t come with big lines of credit. Sometimes, someone with a six-figure job can get stuck too.

Ruining Your Credit Score

Not making payments on time is the biggest pitfall of credit cards. Besides getting trapped in debt, a late payment can damage your credit score, and the longer it is, the lower your credit score drops.

However, you can always boost your credit score again by paying your debt in part or in full. This factor makes it one of the easiest to correct.

You May Read: Which Type of Spending Should Go On a Credit Card?

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