July 26th, 2012
Facebook Question: Should College Students Start Using Credit?
This week, we asked our Facebook fans if they think college students should start using credit cards. We received responses on both sides of the argument. We’ve gathered a few of them to share here on the blog.
AGREE: College students should start using credit.
“Only if they’re taught how to use one properly. I have seen so many younger college kids have credit cards, use them, and then have to pay interest or late fees and they have no idea why.” Smalls S.
“Agree. I think it’s less about whether or not they are college students and more about whether or not they are responsible enough as individuals. However, I don’t agree with pushing credit cards on to them, as was the case when I was attending college. I could not go to the campus stores without someone trying to give me a freebie to sign up for a card.” Nita L.
“Agree. But parents should explain how it works and monitor. Credit cards can be used, but in a responsible way.” Roberta C.
“Agree, if a student has actual income. Yes, many college students (including me) make mistakes with credit cards, but college is about making your own decisions. That’s bound to come with mistakes!” Julie H.
“Yes, but they should also receive mandatory credit assessment so they can learn to use it correctly. The same way they can get a driver’s license after they pass a driving test.” Meg P.
“Sure, if they have a job and can pay their bill.” Brandon C.
“Agreed, college students should start taking responsibility by learning how to use credit and stay within their means.” Emmanuel E.
“Depends on the college student. I had a credit card in college and although I didn’t know much about finance, I knew enough to know not to spend what I didn’t have—unless there is an emergency. Now I have several years of credit card utilization under my belt, which is taken into consideration by credit bureaus (learned that from CK). Great decision on my part.” Sharron H.
“Yes, but we need to education kids about personal finance in high school.” Mike B.
“Strongly agree. These are college kids, why should we baby them? There are just as many adults dumb enough to spend more than they have in their bank account using a credit card. When I bought my first property, I had a great credit score, but couldn’t get the lowest rate because the average age of my account was way too short!” YourPFpro.com
DISAGREE: College students should NOT start using credit.
“Disagree!! Why would anyone want to saddle their children with an interest rate of 19.99% (which you know they do to college students)? Why not teach them to invest their money and save to buy instead of going into debt to buy things? When did instant gratification become the norm? Credit card companies are great at marketing a product and making it seem like you can’t live without one. We did fine before Diner’s Club came around and began pushing people to live beyond their means.” Kirsten G.
“Disagree. I think the students need to forget that. I worked in a bank that gave students credit cards in the 80’s… nothing but trouble and parents upset and many other problems because they didn’t make money to pay back the debt.” Linda J.
“I don’t care about anyone else’s college student. I didn’t get much in the way of education about credit, so when I got two credit cards with $1,000 credit on each and a Texaco Gas card with a $300 limit, I handled it all very poorly. Fortunately, 1995 was a few years ago. I hope to be able to educate my child or get her an education on matters of finance, so that she will have a better idea of what money and credit really are.” Clinton B.
“College students should start learning how to deal with money, without their parents fingers in it. THEN they can figure out what credit is for.” Liz G.
“I disagree. Too many stupid avenues to spend money on, coupled with less maturity and judgement.” Bharath S.
“Strongly disagree. Who needs student loans plus credit card debt? Perhaps a secured credit card. In either case, cash is king and it teaches delayed gratification.” IDropDebt
“Disagree. Back in the old days we worked and took every transferrable class at the community college because it was cheaper. I still got a college degree with no loans. I didn’t go to Harvard and don’t care.” Andy G.
What do you think? Should college students start using credit? Tell us in the comments!
Student Credit Cards
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Its almost that both sides are talking about the same thing – let students have cards but first teach them how to use and not abuse them. While the students should take some responsibility – the banks that issues these cards are only trying to get their foot in the door of these students live at an early age but are not putting any safe guards in place to ensure that they don’t screw up their credit while still freshmen.
I agree – let them have them but teach them first – will save all parties future headaches.
That’s a good point–there does seem to be some sort of consensus, doesn’t there? Thanks for the comment!
I’m 19, and got my first credit card when i turned 18. I got the Wells Fargo credit card designed for college students. My parents taught me that only buy on the card when you have money to cover it. I haven’t always done that, I’ve messed up in that respect, although I have never missed a payment. Now I have 2 credit cards, both of which ive never missed a payment. It just has to be stressed how important credit is to the rest of your life. My score is 689 right now and is steadily rising. I’m personally for it, but just always pay on time, and in full when you have the means.
I have had 3 credit cards since I was 18, the first was $800, another $300, and another $500. I ended up spending more than I had at first when money was really really tight. But I soon learned that lesson and payed off and closed two of the cards. The $800 is now $2300, and I make payments properly now. Granted most of my “income” comes from student loans, but when you consider that student loans are 3.15% interest vs a cc 21% interest, it is still better.
I didn’t get a credit card until after college because everyone told me they were bad. Even now, the only credit card I’ve ever had is a Sears store card which can only be used in Sears.
Now I have no credit or very little credit (not bad credit.. just none). I can’t get a mortgage to buy a house, I can’t get a decent interest rate on my car loan. I wish I had gotten one when I was 18.
I always make the payment on time and I avoid racking up huge bills because of interest. I either buy things that have no interest for x amount of months, or I pay the card off by the end of the month.
I see nothing wrong with giving college kids credit cards. Without them, it is very hard to build credit. It will take 15-30 years to save up enough money to pay cash for a new house. That’s dumb. Might as well be living in it while you’re earning that money…
I think it’s fine for the college students to have a credit card, this way they can start building their credit. But always spend what you can afford, do not abuse your credit card. Also to avoid high interests, always pay on time and if you can do it pay in full. This ways you can get high score at FICO, as lenders always submit their borrowers credit history at credit bureau. The best way to start a credit is by applying a exclusive credit card to a merchant store.