Tan Kin Lian's Blog: Credit card for students?

Thursday, July 19, 2007

Credit card for students?

Dear Mr Tan,

A RADICALLY new type of credit card with no minimum income requirement and just $500 in credit has arrived in Singapore. Is this radical or ridiculous?

The Straits Times cartoon depict something is real and can be quite an issue as students start to live on credit and interest roll over.

Should this be encouraged? Will holding such a credit card be then a trend among the students? Should we start to allow our children to start living on credit at such a young age?

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REPLY:

It is convenient to use a credit card for payments. Students need this convenient mode of payment as well. Otherwise, they will have to incur a high cost to pay by cash.

We can educate the student to pay on time, and avoid the interest charges. They should not live on credit.

It is better for the student to apply for a debit card to use the convenience of making payment. It does not involve any credit. The money is deducted immediately from your bank account.

Some banks are willing to waive the annual fee for the debit card for the first 1, 2 or more years (subject to conditions).

10 comments:

Anonymous said...: But why isn't a debit card sufficient for a student?; July 19, 2007 11:07 AM
Tan Kin Lian said...: I agree that a debit card is sufficient for a student.

I checked DBS website and found that you can get a debit card with waiver of annual fee for 1 or 2 years or longer.

I was under the impression that the charge for a debit card was quite high. This appears to have changed now.; July 19, 2007 5:53 PM
Thomas Phua's Blog said...: UOB has issued Debit card for SMU students, and I understand that it is an innovative product designed by the past SMU students.

I believe there is no charge, but it keeps the students for future business, this is a smart move.

POSB debit card, think will debit from POSB account, if amount fall below $500 in account, is the usual $2 charge?

I hope the authority will be mindful of the impact of issuing such card to the youngsters.

I hope MOE will also look into this to advise students not to be caught in this credit card issue.

- Thomas Phua; July 19, 2007 6:14 PM
Anonymous said...: Excuse me, are you guys financial planners? The credit card is just the begginning.This is the best time young can learn about debt management or credit management so that they will be financially savvy when they turn adults. Give them a free rein; to do whatever they like to discover how to juggle their financial life.But if the parents keep protecting and worrying, the young will have no chance to experience. How much can go wrong? Is $500 a lot? Wait till they have to juggle with another zero or two. They will be lost.; July 19, 2007 7:48 PM
Anonymous said...: This comment has been removed by a blog administrator.; July 19, 2007 8:41 PM
Anonymous said...: This comment has been removed by a blog administrator.; July 19, 2007 9:17 PM
Khiat Han Hwee Adrian said...: A low credit limit such as $2,000/month should apply for students without earning abilities.

The use of the card should automatically be cancelled when debt accumulates to a certain amount such as $10,000.

A student should not be given full reins of a credit card. Many adults are still not able to handle money issues, not to say students.; July 20, 2007 1:45 AM
Anonymous said...: I think it's just right to teach the students on how to use credit cards even at a very young age.

It's not about encouraging them to spend a lot. But it's more of preparing them on how to become more responsible when it comes to handling money matters. This is of the essence especially when they enter college.; August 10, 2007 3:30 AM
credit card for students said...: acquiring a credit card for students have been rampant nowadays because lots of banks are targeting students in campuses and give them freebies so they would apply for a card. Getting a student credit card is not bad as long as you know to become responsible with the use of it and build good credit.; January 29, 2010 1:52 PM
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