With graduate debt averaging over £12,000, the ability to spread
the cost of further education using a student credit card is
obviously attractive. Adding to their appeal is the fact that
these cards are relatively easy to obtain. Unlike many standard
credit cards, they are available to people who do not have a
regular, minimum income and credit history. They often come
with tempting offers including low rates for an introductory
period, shopping discounts and free CDs. Flexing student
plastic has the additional benefit of creating a credit history
that can be used to support future loan and mortgage
applications.
So, with no regular income and credit history, what exactly is
the attraction of students for the credit card companies? Well,
the fact that graduates can expect to earn, on average, £400,000
more over their lifetime than the national average, means that
financial institutions are eager to attract this extra earning
potential. Banks and credit card providers know that the general
public are reluctant to go through the hassle of changing
accounts, so by attracting students early in their career,
they are likely to stay with them for life.
Student credit cards can have drawbacks. If balances are not
paid off in full each month, most cards aimed at students notch
up higher interest charges than their regular counterparts.
These additional charges often cancel out the benefits of store
discounts or free CDs. Credit cards aimed at those in further
education may not attract the useful bonuses that regular
plastic does, for example air miles, cash back on purchases
and interest-free periods.
For details on the latest offers available to students, please
visit: http://www.1st-uk-credit-cards.co.uk/student_cards.html
Credit cards aren’t free money. Flashing plastic creates a
debt that must be managed alongside the repayment of tuition
fees, bank overdraft and student loan repayments. Handled well,
a student will benefit in the future from a good credit rating.
Managed poorly, students may end up with a bad history that
will adversely affect subsequent credit applications.
It’s also important to note that some standard credit cards do
not require the holder to have a minimum regular income or
credit history. Students working part time and holiday jobs
may earn enough to apply for a range of standard cards. So, it
is important for students to check out all suitable credit card
deals, not just the ones aimed at people in further education.
A little research before signing on the dotted line can really
pay off. By taking the time to compare the deals available on
all suitable credit cards, interest repayments can be minimised
and the benefits of holding a card maximised. And that really
is good news for students.
|
