Am I ready for My First Student Credit Card?

For students and people who have recently turned 18, now is when you will begin to think about applying for your first credit card. However, before just plunging straight into the world of plastic purchasing, you should consider if you are ready to cope with the financial responsibility of having access to funds that you have not yet earned.

Having your first credit card can be a large responsibility, as it's very easy, particularly at first, to max out the credit limit. Using a credit card can have the effect of desensitizing you to the value of purchases; instead of paying with the physical value in notes or coins you simply swipe a card; before you know it you will have gathered hundreds of dollars worth of debt without much of a thought as to what your money is being used for.

Think about how you've handled money in the past. If you've usually spent money as soon as it comes into your wallet, then you're more likely to overshoot your earnings and get into debt. If you have asked for large loans from friends or family, think about how responsible you have been at paying them back. If you have delayed the repayment of your debt in favour of spending money on your own, possibly unneeded expenses, then you may not have the financial responsibility to have a credit card yet.

If you have a job, then check that what you earn is adequate to cover all of your expenses, and don’t always think that you can pay for an excessive expense with your next pay cheque; if you allow yourself to justify purchases like that, then you will only find yourself in debt. If you are unable to juggle tertiary studies with a part time job, and you're relying on the support of your parents, then talk to them about what they are willing to pay for; if you constantly make purchases that they don’t want to repay, you might receive a bad credit rating and find it difficult to apply for future credit cards or loans.

When you think you're ready to apply for a credit card, be certain that just because you have the ability to make a purchase, you still think about the necessity of what you're buying, and try not to impulse buy. Frequently checking your bank statements is also recommended, as you can track how much you spend. It also provides you with a chance to check where your money is going; you can notice if an excessive amount of money is being spent on short term indulgences, such as fast food or magazines.

There are credit cards specifically designed for students, with features to fit your needs and budget. A student credit card is usually your introduction to credit and debt, and it can either be the beginning of responsible financial habits and a positive credit rating, or it can be misused and leave you with substantial debt and a poor chance of successful credit and loan applications later in life. It is important to apply for a credit card only when you feel comfortable with the responsibility that is required.

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