What do you know about student credit cards?

August 15, 2007

For many students debt is a reality that they have to face due to the high costs of university. The fees for accommodation, course fees, course equipment fees and other costs all add up and these days the average debt per student is over £10,000.

Due to this level of debt, students often find it extremely tempting to apply for a credit card. Some lenders specifically target students because they know that credit is tempting to them and they are more likely to spend a fortune on their cards. There are a number of deals set out to tempt students to apply for credit cards, with rewards such as money off CD’s and DVD’s being just a couple of the most tempting.

However, whilst these deals may seem good at first, when you really look into them you will realise that there are often hidden disadvantages. For example, most student credit cards offer the student thousands of pounds to spend. Far from being a good idea, this encourages you to go out and spend a fortune because you know you have a large limit. What you do not realise is that this large limit often comes with large interest.

So when a student spends a fortune on their card, often the interest is ridiculously high and they end up in serious debt. With no real way to pay the debt back each month, the interest just keeps piling up and that is when students find themselves in too much debt with no way out.

Overall student credit cards might seem like an excellent idea, but they really can cause serious financial trouble. So if you are planning on spending on your student credit card, remember that smaller purchases are safer as they will not cause you such a large interest rate.