There is no doubt that a credit card is sure to come in handy when money is tight, and you need new textbooks. But what about when a shiny new pair of faux leather pants catches your eye and costs more than you make in a year?
A credit card, although convenient, can be a dangerous possession. It can get you into debt faster than you can swipe it! So, the question is… do you need one while you’re still a student? Let’s weigh up the pros and cons.
The majority of local banks are now offering special student credit cards. These student credit card accounts are created to help fill the financial gap that many students experience while studying. You will also gain access to extra benefits when applying for this type of credit card. For example, the ABSA student credit card; It boasts zero monthly fees, and you get unlimited free swipes, while the Nedbank student credit card monthly fee is only R7,50, as well as unlimited free swipes.
One of the great features of student credit cards is that they come with very low limits. This may not sound so cool, but, in the long run, it will help to prevent you from racking up a load of debt that you can’t afford to repay!
Another notable pro of owning a credit card is you can get a head start on building a positive credit score, while you’re still at varsity! Of course, this is only if you use it responsibly. This is sure to work in your favour in the future, especially when you want to take out a loan to buy a new car or start your own business.
The main con is that a credit card can tempt you into spending money, on things that you wouldn’t normally be able to afford. If you are ‘bad’ when it comes to managing your finances, you might want to hold off on applying for one. Wait until you get a full-time job and are earning more money.
But, if you’re up to the challenge are responsible with your bucks, pay the money owed back on time, and keep within your credit limit, there is no reason why you shouldn’t give a credit card a try.
Various South African banks offer student credit cards. Always be sure to do your research so that you can ensure that you get the best possible deal to suit your needs.
Happy (cautious) spending!