Many people debate whether or not college students should get credit cards. I don’t believe every student should get a credit card, but I believe that they should consider one if they can use it responsibly. I opened my first credit card while I was in college and used it to help build a strong credit score. I believe that when used properly, credit cards are a great tool and can help teach financial responsibility. However, when not used properly, credit cards can become a financial burden. That is why I put together this list of tips to help students learn how to properly use credit cards and begin building a solid foundation for their credit score.
Why College Students Should Consider Opening a Credit Card
Credit cards have many benefits, such as helping you build your credit score, extended warranties on purchases made with your credit card, cash rewards, integration with budgeting tools, ability to dispute charges, limits on liability against fraudulent activities on your card, and other consumer protections. Credit cards can also be used as an emergency source of funds – which is much better than being stranded or getting a payday loan from the local loan shark.
Opening a credit card may be a good idea if:
- You have the ability and conviction to pay the balance in full each month.
- You have the discipline to use it only for specific purchases (shop with a plan, not because you can).
- You need a safe source of emergency funds.
- You want to build a strong credit score through responsible credit card use.
Who should not get a college credit card
Credit cards aren’t for everyone. If you don’t have money in the bank or a source of income, then stay away! Here are some other reasons not to get a student credit card:
- Because you want to live the “high life.”
- Because you get a free t-shirt or other giveaway.
- If you have a shopping addiction or are a compulsive spender or gambler.
- If you don’t plan on paying the balance in full every month.
Tips for using college credit cards
The following tips will help students use credit cards wisely and begin creating a strong credit history.
- Begin with a low limit such as $500.
- Set limitations on what the card can be used for (books and lab fees, yes; pizza & beer, no).
- Only buy items you can pay cash for.
- Never carry a balance.
- Understand the fine print – fees, interest rates, etc.
- Additional tips to avoid credit card fees.
Best College Credit Cards
The best college credit cards don’t have any annual fees, and may offer a rewards program such as points or cash back, or come with a 0% introductory offer or 0% balance transfer offer. The following college credit cards from Citi and Discover are among the best credit card options available to students. Click on the links for more details, and remember, only apply for a credit card if you will use it responsibly.
Top College Credit Card: Citi Forward® Card for College Students
The Citi Forward® Card for College Students rewards students for responsible credit card use by offering incentives such as lowering the interest rates and giving rewards points. The Citi Forward® Card for College Students features a 0% intro APR for 7 months on purchases. Unique benefits include:
- No Cosigner required
- 5 ThankYou® Points for every $1 you spend at restaurants and on entertainment; 1 point per $1 on all other purchases.
- APR reduction on purchases when using credit wisely
- 100 ThankYou Points each billing period that you pay on time and stay under your credit line.
- Apply for Citi Forward® Card for College Students.
Remember, credit cards are like any other tool – in the right hands they serve a great purpose. In the wrong hands they can bring disaster!