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We’ve all heard the jokes about college students getting their first credit cards. Obviously, when people start anything in their lives for the first time, they might not have a full grasp on what they need to do, and it’s usually a good idea to have a steady income to support your credit, but that doesn’t completely invalidate the idea. There are actually some good reasons why college students should try to apply for a credit card at this stage in their lives. We’ve compiled a list of some ideas for you below. Take a look!
You Need Credit History!
We all know that maintaining a good credit history is important in the long-run. Some people might be under the impression that as long as they avoid credit entirely, their history will be immaculate. They’d be wrong since life is far more complicated than that. According to David Slotnick, with Business Insider, people five to seven years out of college found themselves having problems applying for credit cards since they had no credit history to speak of while they were in school. Waiting until graduating seemed like such a good idea at the time!
Credit Scores Are Important, Too!
One again, maintaining credit is important because credit scores are also important. Building a good credit score can help students take out loans or rent an apartment. It’s especially important to students since credit scores are reviewed for car and student loans, future mortgages and apartment rentals.
It Can Be A Good Life Lesson!
They say that college is the time in your life to make mistakes; you can retake a class if you fail, you can’t reapply for a job after you get fired. As we’ve established, it’s better to start maintaining credit sooner rather than later. In addition, it can also be a good idea to learn about, and make whatever mistakes there are, concerning credit before you’ve obtained the bigger responsibilities in life, like a spouse or family of your own. Or at least when you are young enough for your pre-existing family to feel sorry for you and bail you out.
The Industry Needs Help!
Millennials get blamed for the destruction of a lot of things. You’d probably never suggest they’d have a hand in ending the credit card industry, but evidence suggests otherwise. No, really. According to Bloomberg, the survivors of the Great Recession, especially those who were trying to start their careers during this period or had to pay student loans, became too cautious about using credit in their lives, to the point where nearly two-thirds of millennials do not use a credit card, citing a Bankrate article. In turn, this means that banks like JPMorgan Chase & Co. or payment networks like Visa Inc. and MasterCard Inc. will have to pay in the long run since they tend to earn more from credit cards than debit cards.
It Offers Some Security…
We’ve all seen the very special episodes where a teenager gets a credit card from their parents on the condition they use it for emergencies and eventually go on a shopping spree, proving that they cannot handle the responsibility. Now, just because some fictional character was just too irresponsible to handle having credit does not mean that emergencies don’t happen. It can be good to have credit as something of a back-up plan when a car breaks down or when there is a medical emergency. Just remember to try to pay back your debts as soon as possible and not to try to mentally write-off everything as some sort of emergency.
Being Responsible With Credit Will Be Rewarded…
The probelm with credit cards is not that they are evil or bad to begin with but that people are simply irresponsible using them. Not only can you avoid these pitfalls by having good sense using them, you can even be rewarded in the long run. It’s one of the few times in life that behaving gets you anywhere in life. Cash back rewards can also help with paying for the necessities, like food or books. However, there’s a specific reward than can especially help students who have certain ambitions…
You Can Earn Flyer Miles!
Freuent flyer miles! With good credit, you can earn rewards like airline miles and other travel rewards, which can be especially helpful towards students who want to go home for the holidays or possibly when they study abroad. Of course, schools might offer a discount or reimburesement program for study program flights, but it is always best to have a back-up plan. Besides, you are probably not getting reimbursed for going home for the holidays.
It Can Help Fight Fraud!
College is the time of your life when life can make or break you, so it’s probably not the right time to be the victim of a fraud scheme. A lot of credit cards raud protection so cardholders might be spared being held responsible for unauthorized purchases. It can even be safer using a credit card than a debit card, at least when it comes to avoiding fraud; your bank account balance is immediately impacted when someone uses your debit card information, but credit cards are a different story. According to Nerd Wallet, since you haven’t technically lost any money when someone uses your credit card, you can report the fraud, get a credit on your statement, and the issue won’t impact your bank account balance. In addition, some credit cards also offer extended warranties and other protections.
Credit Cards Have Universal Acceptance
Some purchases are hard to make with a debit card, like as mentioned, hotel or car rentals. Since it can be easier to charge customers for any damage, credit cards are a more attractive payment system. Because of this, companies could place a hold of several hundred dollars on your account if you pay with a debit card. There’s also a more specific reason to want universal acceptance when paying for stuff that especially impacts students…
It’s Good To Have When Travelling Abroad!
As mentioned, some students like to study abroad while they are in school. When in foreign countries, foreign merchants might be more willing to accept payment from a credit card instead of a debit card, even if it is issued from a major bank, according to Investopedia.
