Credit cards offer clear advantages to college students because they provide an interest free loan for students until the payment is due and a convenient noncash payment option for both routine transactions and emergencies. If used responsibly, credit cards allow students to build up credit histories that will facilitate increased access to credit in the future. However, if college students have not learned financial management skills in their secondary education or from their parents and misuse their credit cards or mismanage their credit card debt, the disadvantages can outweigh the advantages. Many college students are responsible for making important financial decisions for the first time in their lives and are naïve about managing a budget. As is true with any credit card user, using credit cards to make impetuous purchases can lead to extended repayment periods and high interest charges. Because of inexperience with credit and finance, some college students may not be financially literate and may be at greater risk of substantial debt burdens than more experienced consumers. Consistent misuse of credit cards by college students—particularly combined with student loan debt—could lead to substantial debt burdens.

Main Idea: However, if college students have not learned financial management skills in their secondary education or from their parents and misuse their credit cards or mismanage their credit card debt, the disadvantages can outweigh the advantages.

7. What are the advantages of a college student having a credit card?  

	a. They feel more like other, more affluent students.
	b. They do not have to wait until payday to buy what they want.
	c. They can have several credit cards simultaneously.
	d. They get interest free loan until the end of the month, have access to money without carrying cash; and can build a credit history if they use it responsibly.

	a. When they encounter an emergency and need quick cash.
	b. When they use the card for impulsive purchases, fail to pay off the balance in a timely manner, and mismanage their budgets.
	c. When they need to build a good credit history.
	d. When they need a short-term interest free loan for books and tuition but are prepared to pay it back as soon as the balance is due.

	a. family and high school
	b. other friends
	c. television, movies, and other popular media.
	d. advertisements.

	a. misusing credit card and accruing student loans
	b. possessing several national credit cards
	c. developing a credit history
	d. becoming financially literate