Depending on your school of thought, credit cards are either a great way to manage money and build credit, or else they are a way of encouraging overspending, ruining credit and running up debt, and students are becoming more reliant on them than ever.

Student Credit Card Debt

A study completed by credit card giant Experian found that over half of all soon-to-be graduates used a credit card, with 30% already having racked up credit card debt – the average price of which ringing in at $2.5k.

So what are the arguments for letting students get a credit card when the studies show that a lot of them are leaving college with even more debt?

The Benefits

A credit card gives students the opportunity to become a little more self-sufficient, without relying on the bank of Mom and Dad during their college life. It teaches them about budgeting and managing money, and if done correctly, how to keep on top of credit card bills so as not to end up in debt! Surely being of college age, they should be able to handle it like adults and the sooner they learn these skills, the easier post-graduation life will be.

Furthermore, a good credit score takes a while to build up, so it is best to get working on this as early as possible. This will mean after college, the new graduate will be able to get better rates on things such as rent and finance, and even lower premiums on a variety of different insurance policies. Of course, these are only the outcome, if the credit card use is responsible and careful.

If, as the case often may be, whether the card holder is a student or not, that a whole load of unnecessary or over zealous purchases are put on the plastic, the consequences may be entirely different.

The Drawbacks

On top of an already crippling amount of student debt, some graduates are leaving college with a pile of credit card debt too, starting off their adult life in minus figures before they have even begun to properly live independently.

This could affect their chances of landing a good job, as employers are beginning to look more and more at applicants’ credit scores. This means, irrespective of your final degree classification, you could be ruining your chances of your dream career by putting that obnoxiously large television on your credit card for your college dorm!

So with the line between success and disaster so thin, what is the answer? Just because the monetary involvement from parents is being decreased, this does not mean that the advice should be. For students to get the most out of that little piece of plastic, there should be an open and honest dialogue between them and their parents to help guide them through the pitfalls. As much as students may wish for their credit card spending habits to be secret, this is only likely to lead to an issue, however, with gentle parental guidance and advice, their college years could be the most pivotal in shaping their future money habits, after graduation and beyond.