A credit card is a powerful financial tool. And getting one in college offers multiple benefits. It offers you financial flexibility, so you’ll never get stuck without money at any time. You also get access to attractive rewards and perks on your purchases. Getting cash back or points on your credit card spends means you get even more value for your money. Carrying a credit card in your wallet is safer than carrying cash.
Most important of all, using a credit card allows you to build your credit score. A good score can open many doors for you and make borrowing cheaper for you after you graduate.
But, there’s one crucial tip you have to remember. You’ll get all of these benefits only if you use your credit card responsibly. Using it recklessly will do you more harm than good. These credit card tips for college students will help you get started on the right foot.
3 Ways To Get A Credit Card In College
There are a few restrictions that you’ll need to work around when applying for a credit card in college.
First, you need to be at least 18 years old to apply. In some states the minimum age to get a credit card is 21.
Secondly, you must have a good credit score to qualify for a traditional credit card. Chances are, as a college student, you wouldn’t have had a chance to build credit yet. That puts you in a Catch-22 situation but there are ways around this.
These credit card tips for college students will help.
1. Apply For A Student Credit Card
Student credit cards are slightly different from traditional credit cards. These are designed for college students and are easier to get. They don’t require you to have a good credit score.
These are the basic criteria to qualify for a student credit card:
- You must be at least 18 years old (21 in some states)
- You must have a Social Security number
- You must be currently enrolled in an accredited college
- You must have a source of income
If you’re below age or don’t have any income, you’ll need a co-signer to get approved. A co-signer can be any family member who meets the credit card company’s eligibility criteria.
2. Get A Secured Credit Card
Secured credit cards are generally issued only by banks. To get a secured credit card you’ll need to make a deposit in a bank of your choice. The bank will then issue you a secured credit card against that deposit. The amount of the deposit acts as the credit limit on your card.
When you use a secured credit card, you are in fact using your own funds. So why bother getting this type of card at all? Because it gives you the opportunity to establish your credit history. And that makes it totally worth it.
3. Become An Authorized User On Another Person’s Credit Card
Credit card holders can request their card issuer to add another user to their card. The additional user is called an authorized user. The benefit to becoming an authorized user is that it can help you establish your credit history.
Most people are hesitant about adding another user to their card. This is because if you use the card irresponsibly, it will affect their credit. Usually, only a parent or close family member will agree to add you on as an authorized user.
Tips For Using A Credit Card In College
Getting a credit card is the easy part. Using it responsibly to build credit – that requires a lot of discipline. You’ll be tempted to splurge on items you want but don’t really need. Unfortunately, this can send you spiraling into debt. Not only will this cost you in interest and fees but it will also damage your credit score.
These credit card tips for college students focus on using your card responsibly.
1. Pay Your Credit Card Bill In Full Every Month
This is the single most important tip related to credit card usage. Timely payments add to your credit score and help you build positive credit history.
Late payments on the other hand have several adverse consequences. Your card issuer will charge you a late fee fine and interest on the outstanding amount. Credit cards have the highest interest rates. These added fees will make it even more difficult to pay the next bill. Worse still, the late payment will get recorded on your credit report and shave a few points off your score.
Keep in mind, to avoid the consequences, you must pay your balance in full before the due date. If you pay only the minimum, you’ll avoid the late fees. But you’ll still have to pay interest on the outstanding amount.
If you can’t remember the due date, set up automatic payments through your bank.
2. Don’t Charge More Than You Can Afford To Pay Off
Every credit card comes with a different credit limit that’s set when issuing the card. You can spend up to the limit on your credit card. But just because you can, doesn’t mean you should. It’s important that you have the funds to pay the outstanding in full by the due date. You know the repercussions of not paying your bills in full and on time.
Always keep your budget in mind when using your credit card. Only spend what you know you’ll be able to pay back by the payment due date.
3. Keep Your Credit Utilization Ratio Low
Credit utilization ratio is amount of credit you’re using compared to the total available credit. This is one of the factors that goes into calculating your credit score. A low credit utilization ratio will add valuable points to your score.
So how do you keep your credit utilization low? Use your credit card sparingly and not to get too close to your credit limit. To add points your credit score, you must keep your credit utilization below 30% of your total credit limit.
Let’s say the credit limit on your card is $10,000. You can spend up to that amount every billing cycle and make sure to pay in full by the due date. Your full credit limit is then reset for the next cycle. If you’re using your credit card to build credit, you should limit your spending to maximum $3,000 every cycle. That’s 30% of your credit limit. Spending more than that will increase your credit utilization and lower your credit score.
4. Get Only One Credit Card
It’s tempting to apply for more than one credit card. Every card comes with a suite of attractive perks and benefits. Some offer cash back on purchases. Others offer points, miles, or hotel stays. But getting multiple credit cards can be risky especially when you’re a new user.
For one thing, you’re more likely to overspend when you have several cards. Secondly, you’ll find it difficult to keep track of payment amounts and due dates. This increases the risks of late payments, which means late fees and interest charges. You don’t need these additional stressors or fees while you’re in college. The best thing you can do is get just one credit card and use it smartly.
5. Never Use Your Credit Card To Get A Cash Advance
A credit card may look like a debit card but it definitely isn’t one. Sure, you can use your credit card to withdraw cash but you’ll pay a high price for doing so. Card issuers charge anywhere from 2% to 4% cash advance fee for cash withdrawals. Some also charge additional fees with high interest rates. You’ll end up paying much more than the cash you withdrew using the card.
Final Thoughts On Getting And Using A Credit Card In College
Getting a credit card in college can help set a strong foundation for your financial future. But it only works if you use it the right way. Before you get your first credit card, take time to do your due diligence. First, understand how to use a credit card smartly to build your credit score. Secondly, compare different credit cards and their eligibility requirements and perks. This will help you identify the best credit card for students.
Not sure if having a credit card in college is right for you? Use this guide to help you decide.
| Lender | Rates (APR) | Eligibility | |
|---|---|---|---|
 |
5.50%-16.12%* Variable
3.99%-15.61%* Fixed
|
Undergraduate and Graduate
|
VISIT CITIZENS |
 |
5.54% - 15.70% Variable
3.99% - 15.49% Fixed
|
Undergraduate and Graduate
|
VISIT SALLIE MAE |
 |
4.63% - 17.99% Variable
3.49% - 17.99% Fixed
|
Undergraduate and Graduate
|
VISIT CREDIBLE |
 |
6.00% - 13.75% Variable
3.99% - 13.75% Fixed
|
Undergraduate and Graduate
|
VISIT LENDKEY |
 |
5.66% - 14.72% Variable
3.69% - 14.56% Fixed
|
Undergraduate and Graduate
|
VISIT ASCENT |
 |
3.70% - 8.75% Fixed
|
Undergraduate and Graduate
|
VISIT ISL |
 |
5.62% - 16.85% Variable
3.69% - 16.49% Fixed
|
Undergraduate and Graduate
|
VISIT EARNEST |
 |
5.00% - 14.22% Variable
3.69% - 14.22% Fixed
|
Undergraduate and Graduate
|
VISIT ELFI |
