Finance

5 reasons why college students should have a credit card

College students are young adults who are starting their lives. A college student may or may not be studying in his hometown, which is why it is beneficial to have a credit card. There are many different types of credit cards, and depending on the expenses that a college student incurs, the best card can be chosen.

A credit card is a way to spend without immediately paying for it. The money spent is due to be paid monthly to the credit card company. To many people, owning a credit card before they take a job is foolish. But there are benefits of giving a college student a credit card.

Here are 5 reasons why college students should have a credit card:

1. Helps to establish a credit history:
Regular transactions and repayments on credit cards help to establish a credit history with the credit card company. After a period of time, the college student will become eligible for those types of credit cards that will give him better offers, such as cashbacks, easier loans, insurance cover, discounts on bill payments, and the like. Also, these regular transactions build up the student’s credit score, which helps later on in life while applying for loans.

2. Teaches college students about financial prudence:
One of the most important reasons why a college student should be given a credit card is so that they learn how to spend and save. Though it might be tempting for the student to spend the entire credit limit, with proper guidance, the student can learn the importance of spending for the right reasons and saving the rest in case of emergency. Some of the best credit cards in India offer student variations of their cards which are linked to their parents cards.

3. Helps to avail cashback and credit card points:
Regular transactions with credit cards builds up credit card points which can be redeemed for a range of transactions, such as airline miles, reward meals, and other benefits. Some of the best credit cards in India offer upgrades and fee waivers to loyal customers.

4. Helps to provide cash in emergencies:
Having a credit card can help to provide cash in case of emergencies. Cash can also be loaded on the card in case the limit has been reached. This provides security to the college student to spend up to a certain limit in case of problems.

5. Can take loans against credit cards for big purchases:
There are different types of credit cards that offer loans on purchases, especially on consumer durables. These purchases can be converted to EMI so that it can be repaid gradually. This also teaches college students how to save.

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