For young students, credit cards are more than just a method of paying, they are like a stepping stone towards financial independence of student. Having a credit card allows students to start building their credit history very early, which is very important for young students because for future milestones like renting apartment, buying a car or getting approved for loans.
responsible and careful usage of credit card also teaches budgeting and payment discipline, which are very valuable life skills of personal finance.
Also read: Budgeting Apps | Best free budgeting app? USA
Student credit cards benefit
Student credit card often comes with special offer. Most of the credit card have no annual fee and many offer cashback rewards on everyday purchase like groceries, dining, medicine etc.
In additional Mani credit card offers broad protection, meaning if your card is lost or stolen you can track your card and you are not responsible for unauthorised charges.
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Risk of credit card and common mistakes
While credit card offers wide range of benefits but also comes with so many risks if not used wisely. The biggest danger is falling into depth by spending more then you can pay. Sometimes interest rate can be high and missed payments can damage your credit score which you made with your efforts.
The other common mistake is maximizing your card limit, which somewhere negatively effects your credit card utilisation, it is essential for student to have a budget plan and understand that a credit card is not a free money you have to pay it back. (It is like a loan that must be repaired on time)
Conclusion
Credit card can be a very powerful financial tool for a students in the USA when used wisely and properly.
It also help students to build credit scores, offers convenience, and can even provide rewards on regular spending. However it requires discipline and responsibility to handle a credit card, By understanding the fundaments and root of credit cards student can least strong financial foundation for the future
