Interviewer: Welcome to the interview Mr. Expert. To start with, what is the difference between a credit card and a debit card?
Expert: Both the debit cards and credit cards offer convenient ways for people to make payments without having to carry around cash or checkbooks. A debit card is linked to the holder’s bank account so that money is withdrawn from the account as soon as transactions are made using the debit card. In contrast, a credit card is a line of credit, which allows the holder to purchase goods and services on credit and pay for them in future. A credit card is not connected to the holder’s bank account but to the merchant bank that issues the card.
Interviewer: Is interest charged on using credit cards?
Expert: Interest is usually charged on outstanding balance if the credit card bill is not honored in full by the cardholder. Usually, the interest rate charged is very high to discourage people from defaulting on payments.
Interviewer: Do college students need credit cards?
Expert: College students need credit cards to purchase learning materials, pay for accommodation and bus fare and other expenses.
Interviewer: Why do students need credit cards and not debit cards
Expert: In order for student to use debit cards, they must have a loaded bank account. Unfortunately, most students are not working and therefore cannot use debit cards. On the other hand, credit cards give students a loan to purchase goods and pay for them later.
Interviewer: Can students use credit cards to build their credit history?
Expert: Yes. One of the major advantages of using credit cards is that it can improve the user’s credit worthiness when used wisely. If students use the credit card regularly and make monthly payments on time, they can build a reputable credit history and be trusted by other lenders.
Interviewer: Can students get rewards for using credit cards?
Expert: Depending on terms given by the card issuer, credit card users can qualify for a variety of rewards including cash back on bulky purchases, airline mileages and gift vouchers.
Interviewer: How many students have credit cards?
Expert: The number keeps changing each year. However, industry statistics indicate that between 2010 and 2015, 35% of American college students owned credit cards (Manning, 2001).
Interviewer: What are the disadvantages of students using credit cards?
Expert: The biggest disadvantage is that late fees and interest are charged when the credit card holder defaults on payments. Acquiring too much of credit card debt can ruin students credit score.
Interviewer: Any other disadvantages
Expert: Another disadvantages include possibilities of card fraud, consumer bankruptcy and compulsive buying. Generally, credit cards tempt users to spend more than is necessary.
Interviewer: How can students avoid credit card pitfalls?
Expert: Students can maximize the benefits of using credit cards by keeping track of monthly purchases, having a budget and by making efforts to pay credit balances each month. Other measures to take include making purchases with reliable companies when doing online shopping and reporting stolen or lost cards immediately to the issuing company.
Interviewer: What is your advice for a student who is seeking to start using a credit card?
Expert: Not all credit cards are issued with the same terms and conditions. Students should take their time to understand the benefits and risks associated with different credit cards. They should compare credit cards before choosing one that matches their spending habits and lifestyles.
Works Cited
Manning, Robert. Credit card nation: The consequences of America's addiction to credit. New York: Basic Books, 2001.
