The reason that a growing number of banks these days are offering students credit cards, and attractive credit card deals to students is because they realize that the students of today are going to be the successful professionals of tomorrow.
A student will most likely stick with the credit card company he or she was with as a student, once his or her education is over. Studies have shown that this is actually the case. Students do actually prefer to continue with the same company because they’ve formed a relationship with it, they know how it works and are comfortable with the company.
Of course students using credit cards can be a good thing. Some students tend to get more responsible after they get a credit card, realizing that it is not something that can be taken lightly. But there are major negatives to the phenomenon of students getting credit cards, when they hardly earn any money. Some experts say that it is bad because the credit limits of the cards are based on what the company thinks the student will earn at a later date and not on their current financial situation.
Also, students, as everyone knows, like to live it up, party, have a good time and spend their money on entertainment. They usually do not use the credit card to invest in something that will fetch them money later on. They then refuse to pay their credit card debt thinking that they don’t really have to pay for something they don’t have anymore. It is being noticed that an increasing number of students are defaulting on their credit card payments. Of course, there are a large number of students who don’t default on their cards, but the ones that do, do in fact place a huge financial burden on the bank.
Just like anything else, the student credit card story, has two sides to it. Firstly, it is obviously beneficial in certain regards. As mentioned earlier, some students use it as an indication that they now have to take their financial matters into their own hands and do actually start to get more responsible. Also, since tuition fees and living expenses are rising sharply, credit cards are helpful to students in times of need.
There are a number of negatives to the credit card story though. Firstly, students have no credit history at all and getting off on the wrong foot by misusing their credit card is not the best thing for them. Some students probably don’t even realize the gravity of the situation. Possessing credit cards can even lead to bad spending habits. Anyone who’s owned a credit card knows how difficult it is to spend wisely and not overuse the card.
Discuss Add this link to... Bury
A student will most likely stick with the credit card company he or she was with as a student, once his or her education is over. Studies have shown that this is actually the case. Students do actually prefer to continue with the same company because they’ve formed a relationship with it, they know how it works and are comfortable with the company.
Of course students using credit cards can be a good thing. Some students tend to get more responsible after they get a credit card, realizing that it is not something that can be taken lightly. But there are major negatives to the phenomenon of students getting credit cards, when they hardly earn any money. Some experts say that it is bad because the credit limits of the cards are based on what the company thinks the student will earn at a later date and not on their current financial situation.
Also, students, as everyone knows, like to live it up, party, have a good time and spend their money on entertainment. They usually do not use the credit card to invest in something that will fetch them money later on. They then refuse to pay their credit card debt thinking that they don’t really have to pay for something they don’t have anymore. It is being noticed that an increasing number of students are defaulting on their credit card payments. Of course, there are a large number of students who don’t default on their cards, but the ones that do, do in fact place a huge financial burden on the bank.
Just like anything else, the student credit card story, has two sides to it. Firstly, it is obviously beneficial in certain regards. As mentioned earlier, some students use it as an indication that they now have to take their financial matters into their own hands and do actually start to get more responsible. Also, since tuition fees and living expenses are rising sharply, credit cards are helpful to students in times of need.
There are a number of negatives to the credit card story though. Firstly, students have no credit history at all and getting off on the wrong foot by misusing their credit card is not the best thing for them. Some students probably don’t even realize the gravity of the situation. Possessing credit cards can even lead to bad spending habits. Anyone who’s owned a credit card knows how difficult it is to spend wisely and not overuse the card.
Discuss Add this link to... Bury
LinksMarker is a Web 2.0 content management system
Comments