Students and Credit cards can mix (Credit Cards in general)

Member Name: shopaholicleo

Product:	Credit Cards in general
Date:	04/03/09 (72 review reads)
Rating:

Advantages: You can shop internationally, you're also covered for purchases over £100

Disadvantages: It is tempting to put everything on there

I am probably the type of person that shouldn't have a credit card. I love to buy anything, especially clothes, and I tend to buy things on impulse without really considering that I may have many more of the same thing at home. A £1500 credit limit on my first card, not long after Christmas wouldn't immediately seem like the best idea, but I knew that I would use it responsibly. I plumped for the M&S and More card, which offered 12 months interest free and 1 point for every £2 spent (as a student, it was the only way I could afford to shop there). After receiving my card, I soon realised that I'd have to pay something each month, so it wasn't really free money, but at least it would allow me to take a bit of time to pay for things over the course of the year.

My main use of the card was to buy flights to Hong Kong as soon as I saw a good deal. I was working quite a bit at the time, so knew that I'd be able to cover it. Gradually a few other bits ended up on the card, such as new boots, and festival tickets, stuff that I perhaps wouldn't have necessarily had the funds to buy immediately, but the 12 months interest free on purchases allowed me to pay them off gradually, plus I accumulated a fair amount of points. I also paid for my university halls fees on the card, and put my loan into a savings account for the remainder of the interest free period. Once the interest free period finished, I continued to use the card for large purchases, purely to get points, but it can also offer piece of mind paying this way just the company that you've bought from ceases to exist (you're covered for purchases over £100). I find that the 56 days interest free period on my card is long enough for me, as I tend to pay the balance off in full once I get my statement.

I would advise a student thinking about getting a credit card, to understand the logistics of having one, such as APRs and minimum payments, instead of just taking one because your bank says you're 'eligible' for one. I have tried to help my friend understand that withdrawing money on the card is not the best idea (as interest is ALWAYS charged, so you can scrap paying it off in full when the bill comes), and that paying off the minimum payment just tells the company that they can make money off you for many, many years, but it does just fall on deaf ears. I think a lack of information and awareness can get people into sticky situations, and the detached nature of spending the credit card gives you, doesn't help with this. I wouldn't recommend getting one if you're well into your overdraft and looking for a last resort, but if you do have a part-time job and budget in place, I'd recommend making the card work for you with the various cashback or air miles offers. I can make my £12 in Marks and Spencers vouchers can go a long way in the food hall, and I know most students would appreciate the odd treat like this.

I believe that having a credit card since the age of 18 has helped my credit rating quite a bit, and as I've never paid interest on it, I don't feel as if I've lost out. Having the right attitude is key, and self control is a major factor in me not going overboard, and I do aim to live within my means (meaning a splurge can realistically be paid off within 56 days). There are some pricey things that I may 'want', but I know saving up for them and making sure I have the money in place (before perhaps putting them on the credit card to accumulate points) is a much better option. I think I'm scared by having large amounts on my card anyway, so I prefer to have manageable amount on it, ideally under £150. A benefit of having a credit card, is the freedom it gives you, as Mastercard and Visa are accepted and recognised worldwide (try paying with your Solo card in Hong Kong) making it easier to get bargains from abroad via the internet or to pay for something in a shop when visiting abroad. You also have a bit of time to think before committing to a purchase, so if I end up buying a lot of things from ASOS in various sizes, I know that I can refund it all without a penny having left my account. I know the situations I face could be different once I graduate, once the added costs of everyday start building up, but I'm hoping that with this financial knowledge and attitude, I can keep it under control.

Summary: Do your research and play the game