Credit card: A smart choice for students?

Nidhi B

Credit cards are like a trusted companion that always provides support during emergencies. With the credit card, students have a readily available loan option, without having to wait for them to apply for a loan and then get it approved. Credit card facility makes it hassle-free, where you have money at your reach whenever you need it.

Source: The Economic Times

HDFC Bank's Digi Youth initiative allows students aged 18 and above to apply for credit cards, students can leverage their parents' good credit history, as long as their parents have a steady balance and a strong credit score as a benefit.

"When you apply for a credit card, you would be granted a credit limit of up to Rs. 1 lakh, which can be helpful for students who live far away from their hometown. This credit limit can be used to cover their expenses, such as paying apartment rents, travel expenses, exam fees, and more. The money that has been spent should be repaid within a specific time frame, which is normally between 45 to 50 days. By doing so, this will help the students maintain a healthy CIBIL score." Said Poornima A HDFC bank official.

Poornima says that maintaining a good CIBIL score is crucial for students, as it directly relies on their credit history. A good credit score is essential because it enables students to secure better interest rates on future loans, which can be highly beneficial. Additionally, a good CIBIL score makes it easier for students to obtain educational loans for higher amounts. Many credit cards also offer rewards that can cover expenses such as exam fees, campus visits, and other essential expenditures, making it a helpful option for students to manage their finances effectively. 

Source: Pinterest

However, Despite the numerous benefits of credit cards, students must also be cautious about potential fraud transactions. It's essential to be cautious when dealing with unknown numbers, avoiding calls and messages from suspicious sources. Additionally, students should never share their PIN or OTP with anyone, including friends, to prevent unauthorized access. To mitigate these risks, banks offer various insurance policies for card protection, providing security for students, she added. 

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