In the United States, as soon as you turn eighteen, you are bombarded with solicitations from credit card companies. They all want you to sign up for their cards. When you are at this age, often times this sounds very appealing since you probably have limited income… it’s a way to live the “good life” even if you don’t have the money to back it up.
Why will student credit card debt hurt you for years to come?
As strong as the temptation may be, you need to realize raking up credit card debt now will hurt you in the long run. First of all, the interest rates on student credit cards are sometimes 20% or higher. If you only make the minimum payments each month, at that rate it means paying it off will take years. By the time you do pay it off, you will have paid several times the amount you originally spent due to the sky high interest rates.
What are some good alternatives to using a student credit card?
At that age, your income is unpredictable, so it’s best to only live within your means (spending no more than you make). One way to do this is with a charge card instead of a credit card. A charge card requires that the balance is paid in full each month – therefore you won’t be tempted to carry a balance. Recently, the American Express Zync Card came out, which is a charge card specifically geared towards young adults and even college students. Unlike the other charge cards on the market that have annual fees of a $100 or more, the American Express Zync Card only has a $25 annual fee. Another excellent option is to just stick with your debit card – that’s a great way to control spending since it won’t allow you to spend more than what’s in your account.
Conclusion
Whether you go with an American Express student credit card or just a good ol’ debit card, there are plenty of good alternatives to using student credit cards.
