Credits Cards - A Disaster Recipe for Students

It's the start of new school/college year when students come to know the 'true' meaning of money - earning, spending & saving it. But there are also bunch of credit card companies sourcing for kids who don't have enough money to fish out for their regular living expenses. At a legal age, students have the right to make their own decisions along with suffering the repercussions that come with the responsibilities. Credit cards are just one of the perfect ways to show off the 'cool' plastic money while pretending how responsible they have become.

Credit card companies are well trained to trap vulnerable, cash-strapped students who will fall for the "free cash" and "free lunch" schemes. If credit cards offer so many discounts and free money, why are they blacked out by so many students?

• Students do not know how a credit card works or how to use it efficiently. Ultimately, no one wants a bad credit history to create future problems for their career. Though on the outside credit cards are an oasis of free money, banks charge a wholesome amount of interest rates and charges on the cards.
• A credit card is like the forbidden apple. You want it, but when you get it, it becomes unaffordable. Students spend all (or some over) the credit limit assigned on the card, but when it is time to pay up, they have holes in their pocket. It becomes a vicious circle as you are sucked in the Great Canyon of Debt.
• Before a student applies for a credit card, he is already deep in student loans. Yes, he may have to pay it six months after he graduates, but credit cards are not similar to student loans. Credit card companies want their money immediately and if you don't have it, you will find yourself deeper in debt.
• Credit cards are supposed to be used in emergencies. But students find everything an emergency, right from buying books, clothes, to food. Every purchase & expenditure seems justified, which of course is a trap by the credit card company.

Before going for a credit card, educate yourself about the pros and cons. Know the interest rates, fess and due dates and your capability to pay within the time limit. Avoid building up huge monthly bills that you would have to pay for the next decade or so. There are a few points to note before you get a credit card

• Credit cards are high interest loans in disguise
• If you don't pay the credit on time, your credit history is hampered for the future as well
• Don't abuse the credit card facility by not paying up
• Know the facts - legal age for issuing cards and the high interest rates companies can charge
• Avoid impulsive shopping and use the money only in emergency