Is a Student Credit Card Worth a Free T-Shirt?

Banks offer plenty of incentives to sign up for their student credit cards. If you're in college, there are some positives to having a card, but that's not a decision you should make lightly. Here's a guide to avoid being swayed by any incentivizing swag your bank might want to provide.

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By Sarah Wright

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FREE IPOD! Oh, and a Credit Card Too.

If you spend time doing anything but going to class on campus, chances are you've seen kiosks for banks and other lending institutions. They might offer a variety of services, like student checking or information about loans. But you've probably also encountered offers for student credit cards.

Often, these offers come with some sort of incentive to sign up, like a t-shirt or keychain or even a free iPod! Whether the free item is worth $10 or $200, or even if you aren't being offered any incentive at all, you should think very carefully about getting that student card. Here's why.

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Causes for Concern

Do you really need to open a line of credit?

Credit cards aren't just magic tickets to free stuff that you can pay off whenever it's convenient. Opening your first card is a step into the world of credit scores and financing, which can have a severe impact on your life. Some employers even see a negative credit score as a sign of a potentially untrustworthy worker. Given those long-lasting problems, consider whether you're really ready for the responsibility of owning a card.

Are you disciplined?

Having a credit card can be tempting. Suddenly extravagant purchases are within your reach, and the idea of breaking down a several-hundred-dollar pricetag into a few monthly installments of $20-$50 can be very appealing. But before you even take out a card, you should think about whether you'll have the power to resist leaning on it.

Sure, using your card to buy something special once or twice isn't going to hurt anything - as long as you can afford your monthly minimum payments. But will you really be able to limit yourself to doing this a few times? And will you really be diligent about paying your bill when it's due? If the answer to either of these is anything but a firm, enthusiastic yes, you should probably wait until you have a more stable financial situation to apply for a card.

Why It Might Be a Good Idea

Are you responsible and concerned about emergencies?

If you're already in good standing with all of your monthly bills and you have experience keeping track of your spending, getting a student credit card could be a great idea. First of all, a long credit history looks good, especially if it's in good standing the whole time. Plus, having a credit card can be really helpful in emergency situations. Student cards are designed to appeal to younger consumers without a credit history. If you've considered it carefully and think you're ready for the responsibility of a line of credit in your name, it might not be such a bad idea to go ahead and apply.

Think about the impact that debt can have before signing up for a credit card you don't necessarily need.

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