“Charge it!”  It may feel great to just swipe a plastic card and that brand new shiny Michael Kors purse is now yours to enjoy.  But by the time you are at the next party  showing off your purse, the credit card bill is in the mail and soon you will have to pay for the purse.  You have following options; to pay your bill in full, make a partial payment or  pay the “minimum” payment.  But beware – once you start paying only a portion of your credit card bill, you will be charged interest the next month and this is where financial hardships can begin! The word “debt” is one that many students are familiar with because often they are already dealing with student loans due to high tuition costs.  Once students get into a habit of “charging” their purchases, they can easily fall into the debt trap and this is one of the risks associated with carrying a credit card.

Risks:
-may damage your credit score if your payments are late or you don’t pay the balance owing.
-high interest rates.
-you may carry an on-going debt that you find difficult to pay off.

However, there are many benefits of credit card usage if the card is used for the right reasons and in a responsible manner!

Benefits:
-lets you borrow money instantly to make purchases.
-allows you to carry less cash.
-helps you establish a good credit history and earn a good credit score.
-provides a free form of credit if you pay the balance in full and on time.
-the card may provide a rewards program which can be used towards free travel or other items.

In summary, it is beneficial to get a student credit card only if you plan to use it responsibly by not letting the risks outweigh the benefits. Try to find a card in which you obtain points on every purchase made.  This may lead you to a free trip of your choice! Think of being on the sunny beach forgetting about the books, all thanks to redeeming the points on your credit card. But remember that you won’t be able to enjoy that beach trip if your debt load and interest charges are accruing. Credit cards are the ultimate test in your new adult responsibilities.