Credit Cards for Students – Are They a Help or a Hindrance
Debt and credit cards have become an inevitablepart of a modern UK student's life.
With graduate debt running at an average of over £13,000,it is easy to see the appeal of gaining the ability to spread the day to day living costs,putting them off until that high paid post college job appears.
Visit most UniversityFreshers Fairs and it will be easy to find several different banks offering student financialservices, alongside Virgin and Barclaycard student credit cards, all with low introductoryrates, shopping discounts, free CDs, or other new gift idea.
Despite having a low irregular income and no credit history, students represent an idealtarget for the banks.
The reasons that students are desirable as new customers is that overtheir working lifetime graduates earn on average of £400,000 more than non-graduates UK, combinedwith the fact that once they have accounts in place, people are generally reluctant toswitch to other providers, and so by attracting students early in their financial life, theyare liable to remain with the same credit card provider for life.
Obtaining a student credit card can also be of great benefit to students, not only byassisting with the daily budgeting, but also by initiating the creation of a credit historythat can be used to support future loan and mortgage applications.
There are drawbackshowever, and it is however important to be remember not to abuse these newly obtainedcredit facilities, as any credit obtained will always need to be repaid and buildingup a poor credit history can prove damaging to future finance applications.
It should be noted that students are not restrictedto just choosing a student credit card, however as some standard credit cards do not requirethe applicant to maintain a minimum regular income, however there is generally littleor no difference between the cards themselves, and the various free extras combined withthe ease of obtaining a student credit card rather than a standard one, frequently makestudent targeted cards a better option.
With online fraud protection, travel assistance,online account management, 24 hour helplines and free text alerts set up to notify whenpayment dates are due, the beneficial reasons for students to obtain a card are numerous,and as long as care is taken to not over use the facilities and repayments are met, thena credit card can provide a useful flexibility for their personal finances.
An important point to remember whenever takingout any form of finance is to take the time to compare as many of the currently availabledeals that are available.
With a little care and a simple check on the suitability andinterest rates which will be payable, using free credit card comparison services likeMoneynet can help to minimise the potential repayment costs involved in the future aswell as maximizing the various benefits.
Disclaimer: All information contained in this article,is for general information purposes only and should not be construed as advice under theFinancial Services Act 1986.
You are strongly advised to take appropriate professional andlegal advice before entering into any binding contracts.