Credit cards teach students financial lessons

Jocelyn Swartz

Credit card marketing and applications are prevalent on campuses across the nation. Credit card applications are passed out in courtyards and are thrown into bags at the bookstore. The plethora of applications can be considered to be convenient by those students who wish to build up their credit scores with credit cards from reputable companies, but on the other hand, accessible credit card applications can also prove to be disastrous for others on the same campus.

Credit cards are handed out to 18-year-olds as a rite of passage; these young adults are now legally able to build their own credit history with no direction from parents or guardians. They are now responsible for their own financial future. These new credit cards have a low credit line of $250, but this moderately low number can turn into hundreds of dollars very quickly when late payment charges and over-draft charges are accessed.

Credit cards being accessible on college campuses has now become expected; high school seniors are prepared for the applications and no longer enter the doors of a financial institution to gain the plastic card which gives them shopping freedom. Attaining a credit card is now simpler than ever.

Having a high credit score enables many adults the financial freedom and ability to receive loans to purchase a car and eventually a house. Having a low credit score hinders this freedom, causing a co-signer to be called upon for considerably trivial things, such as acquiring an apartment lease.

Credit cards are the first means for young adults to start building their credit. Having credit cards on your credit report is actually a good thing, if they are in good standing. This shows that you are able to manage your finances and are trustworthy with another company’s money. But one must always keep in the forefront of their mind that credit cards, if not managed appropriately, can have a negative affect on one’s credit report that could take up to seven years to disappear. This means that if a college freshman opens up a credit card account their first semester and does not pay the bills on time, it will result in negative credit scores that will haunt them until they are 25 years old.

Opening up credit card accounts with comparably low credit lines has become a learning device for young adults. It enables them to experiment with financial freedom and gives them the time which may be needed to right their financial mistakes by the time they wish to purchase expensive and rewarding items, such as a car and a house.

Being financially successful and intelligent takes time, and it is a process of trial and error. Once anyone experiences the frustrations that can result from debt, especially credit card debt, they are unlikely to repeat the process again. Financial maturity cannot come through a lecture from a parent or guardian; it must be self-taught.

Credit card companies are able to teach young adults the tough lesson of financial responsibility in such a manner that will be beneficial to both the person who keeps their balance below the limit and always pays the bill on time and also to the individual who goes over the limit and is consistently late with payments. Credit card companies are willing to work with their clients, which at the end of the day will benefit both the company and the credit card holder.

Having a credit card at a young age is a good way to practice with finances. It gives everyone the ability to establish credit, as well as fix any mistakes that are made earlier in life. Credit cards are the least daunting method of establishing credit. Credit card accounts should be opened early, and college is the prime location for doing so.