As a student, you might be offered opportunities to borrow money – this is known as credit. Access to credit can be both positive and negative. Although it’s advisable to try to live within your means whenever possible, sometimes emergencies happen and in these circumstances, credit will be very helpful. Applying for credit can also help improve your credit rating in the future. However, you must remember that credit is not ‘free money’ – it always needs to be paid back – and if you splurge on credit, it can end up costing you a huge amount in interest and charges.
Here are some common credit options – some are okay (providing you don’t go overboard with your spending), and some are best avoided.