Student credit cards called risky safety net

Students won’t be the only ones flocking to university campuses in a few weeks.

Students won’t be the only ones flocking to university campuses in a few weeks.

Kiosks promoting various student-branded credit cards have become a ubiquitous sight during many orientation-week festivi­ties, often waving free T-shirts and other swag to help lure potential customers.

While credit cards can provide a certain degree of security and flexibility for students, experts say there’s a lot young adults need to know before they get into plastic.

Michelle Duke, head of client strategy with Royal Bank of Canada, said students need to understand what purpose a credit card serves before they sign up for one.

“Credit cards are there for purchases that can be paid off on a monthly basis,” she said. “It’s not to carry credit card debt, because it’s an expensive way to carry debt and you certainly don’t want to fund your education costs with a credit card.”

Parents can arrange for their children to have a “family card,” in which the kid gets a slice of the family’s total credit limit.

“It gives the student access to a credit card, but it also keeps them living within certain parameters,” Duke said.