Having credit card as student

Credit card has both positive and negative results based on an individual who goes to the bank to apply for a credit card, sometimes you may get a call from Nedbank offering you a credit card. The main purpose of the credit card is to provide you with access to extra money which you can use and pay it back in full or instalments at a certain percentage normally ranging between 2% to 5% depending on the bank offering the credit card. It all depends on the bank since ABSA bank may offer 3% or FNB bank may still offer the same percentage but with unique conditions as compared to other banks in give could be standard bank or investec bank.

Having a credit card as a student can be stressful since you’re most likely to not have reliable source of income on a monthly basis to pay back the money borrowed from the credit card. Every month when you’re not able to pay the money used from the credit card the bank charges and deduct the amount based on the percentage to gain their interest and when you have to pay the money due to the bank it will be more by additional interests charged. Regardless of you being student, the bank treats you as a working class and apply the same rules to recover the money granted to you based on how much of credit you qualify. 

When applying for credit card as a student the bank does background check to verify if you really qualify to have a credit card considering the fact that the bank also needs to recover the money spent of credit card. It is therefore advisable that as a student, consider getting a credit card only if you have a reliable source of income or back up plan to pay back the money used from the credit card in order to avoid additional charges based on the percentages that the bank charges. In cases where you’re not able to pay back the money used from the credit card it will result in you having a bad credit record which may have negative implications in the future when you need to buy things such as car or a house. 

Based on my advise, it is always best to rely on the money you get on a monthly basis so that you are stress free of having to work extra hard to pay the debt which may take years or result in you having a bad credit record. Money can be easily spent but it takes time to save the money and at times may be stressful since the rate of employment is also low and salaries from temporary jobs may not really be enough to accommodate all the expenses. One needs to be very careful especially when it comes to credit card. In conclusion, I would say it is not meant to enhance or maintain the the lifestyle but most importantly for the purpose of being used in case of emergency. 

By Desmond