Should students today own a credit card? This is actually one of the biggest financial questions that parents and students face. In the 21st century, credit card has significantly affected the life of many people. We basically use credit card in shopping online or even paying bills. For a student who will be heading off to the university, having a credit card is just normal.
Vincent Bond, a debt specialist conducted a 900 strong survey. According to his survey, approximately 80% of students think that debt is a reality of life. In today’s tough economy, debt is considered a necessity specially when spent for education purpose. However, parents should help the student draw the line between good debt and the other way around.
Credit cards in any situation should never be the first option. Loans and commercial cards do not help students in any way if the students get heavily in debt because of them, according to Steve Rees. Initially, these types of debt are great because you get a 0 percent deal, but it will surely create a cyclical problem and you will be dealing such type of problem right after graduation.
Loans and credit cards should only be used as little as possible and only if badly needed. For an instance, if the student borrowed in a card, then the first goal is to pay off the borrowed amount. Most banks usually offer credit cards if you sign up for a current account, according to Moneynet.co.uk. Hence, as a parent you need to make sure your child is fully aware with this.
Do not ever use credit card as extension of your budget because there is a high possibility that your budget will be squeezed further, especially if you didn’t clear the account in full. The balance in the credit card debt will charge interest every year. So you will literally be facing further financial problems.