Should college students have credit cards?

Credit cards are one of the most important tools Americans can use to help them become financially stable. Credit cards can prove one’s financial credibility, provide safety nets and even teach someone about budgeting. Allowing adult college students to responsibly use credit cards navigates them into becoming responsible members of society. The benefits for credit cards go on and on but counterarguments are often pinned against allowing college students to have credit cards. These arguments include the fact college students are uneducated on credit cards and that they are too irresponsible to handle credit card limits. These arguments are nothing but indirect jabs at external issues and do not present a solid argument.

Credit cards work on a simple principle; borrowers can responsibly pay back their bank on time and doing so will provide them with rewards, boost credit scores and teach them about personal finance. By having a credit card at 18, students can leverage the head start to build a good credit score which helps them attain loans in the future. Having easier auto loans and mortgages can save them hundreds of thousands of dollars over time. Additionally, students will have much less cash flow than middle-aged adults, and doing so lets them build foundation credit card habits with lower margins, providing a much safer way to be introduced to borrowing. Moreover, it is mutually acknowledged that college students are not the most affluent demographic, but having a credit card can help them make safety nets in the event they desperately need cash. Lastly, credit cards can teach students about responsibly paying cyclical charges and that compounding interest is an extremely powerful tool, both of which can set them early for future success in sectors like budgeting and retirement.

Having access to credit cards comes with strong support for the crowd, especially considering that well over half the college students aged 18 to 24 have a credit card, according to U.S. News & World Report. However, the world of regular borrowing does not come without nay-sayers. The major arguments around credit cards include ‘college students are irresponsible’ and ‘early access to credit cards can hurt one's credit score’. These arguments are rooted in logic and numbers. For example, according to Wallet Hub, the mean credit card balance for college students in 2018 was $1,183 whilst the median was only $400, signifying that there is a small portion of students with large balances who sway the numbers. But all of these arguments fall victim to the logical fallacy ignoratio elenchi, which translates to ‘irrelevant conclusions’. Credit card discounters are not arguing for the fact credit cards are inherently harmful to young adults, they argue that young adults don't possess enough responsibility or education to be good borrowers. We can resolve every major argument against granting credit cards to 18-year-olds by simply boosting education about credit cards, having the tough conversations about the dark side of usury, and trusting college students.

GLTA

Archit Joshi