Disadvantages Of Student Credit Cards
Just like there are a lot of advantages to a student credit there are also lots of disadvantages. Let us analyze the disadvantages of having a student credit card.
The interest levied on the credit card is quite high such that student are the worst affected in terms of paying off the interest. If you are able to pay back the amount spent well within the credit period then you are safe. Student credit card usually comes with 0% interest for the first six months with a lot of benefits. It is advisable to maintain a good record of payment which helps you to create a credit history with which you can go in for loans at a later stage.
As a student you should be very careful in making use of your card. You should never go beyond the credit limits as it would become a heavy burden while repaying the same. If you miss to make your payment on time then it would be carried forward and you will be paying interest for interest which ultimately will lead you to credit card debt. This would mean that you be paying much more than the original cost of the items that you had purchased with your credit card. It becomes a total waste of money.
When you buy things which the cash that you have, you tend to spend within limits and also purchase only what is required. Whereas when you hold a card and make the payment for your purchases through your card then you tend to buy more than your limit, things that are too expensive or could be considered as luxury. Also when you hold a card you are tempted to buy more and feel safe at that moment but you never realize where it is going to lead you.
There are annual fees fixed for these cards which will add up to your cost. Also there are some transaction fees levied on certain articles purchased. This again will dd up to your cost. You have to make use of your card very wisely analyzing what are the ways to avoid paying more for your card and be on the safer side. But these transaction fees vary from card to card and from dealer to dealer.
Thus you will find that if you are not able to manage your card, you will end up with facing a lot of problems in payment after your graduation. It becomes a debt that is carried on after completion of your studies. Also if your income turns out to be less than what you had expected then paying for these cards will be a headache. Late payments and interest will keep accumulating and you will land up with serious consequences.
It is always advisable to make your payments on time so that it is not carried forward with a late payment charge. Also do not spend over limit. There are separate charges for spending over limit. Try and make payment more then the specified minimum amount to bring down your debt. So remember all these points when you sign up for a student credit card. You are solely responsible for spending and repaying the same. So keep to your limits.
