As a student, you see bills constantly: tuition payments, textbooks, rent, groceries, gas, cell phone, etc. The cost of being a college student really begins to add up. Once in a while, you may not have enough money saved for these expenses. In those instances where you’re waiting on a paycheck, a credit card can be an extremely beneficial tool.
You’ve likely heard the saying, “with great power comes great responsibility” in the world of superheroes, but it also can be true with credit cards. Because a credit card gives you access to a large sum of money, you have to be reasonable with the management of your credit card. Below are tips from ten college students to help you learn vicariously through the students who have experienced these credit card lessons themselves.
1. You’ll learn about financial responsibility
In the time between when you’re wondering how to get your first credit card and when your account is open for more than a year, you will learn a lot about financial responsibility. What better time to learn than when you’re young. Rachel offers her advice on the learning experiences of credit cards for college students:
“Some will argue that students will be irresponsible with a credit card, but the reality is that if people do not learn to become responsible with credit cards while they are students, then they will become adults who do not know how to be responsible with credit cards. A low-limit credit card can provide a valuable learning experience for students that can shape their financial future. I had an advisor who once gave me some sage advice that changed my perspective on credit cards: ‘With great credit limit comes great responsibility.’ Learning about these responsibilities before having access to a great credit limit put me on a path to future financial success and afforded me the freedom to pursue a new career path as an adult.”
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Rachel C. Touro College |
2. You can spread out your purchases over time
When you buy something on credit, you have a grace period to pay the money back. That means you can use your credit card on everyday purchases that fit into your college budget, but you won’t have to pay the balance until the due date on the statement. When all of your transactions are viewable in your credit card mobile app, you have an easy way to reference your spending habits and stick to a college student budget. See what Caleb from Michigan State University has to say about the subject:
“Credit cards usually allow a month before repayment is required--a huge advantage for someone who is just getting their feet wet in the world of expenses that college life brings. In addition, credit cards offer an excellent opportunity to help students establish a budget. By tracking monthly spending in one place, students can build a healthy awareness of their own needs and habits when it comes to money.”
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Caleb W. Michigan State University |
3. You’ll learn to shop efficiently
When you apply for a card from a credit card issuer, they give you a credit limit. Because you cannot spend more than your predetermined credit limit without making a payment, you won’t be able to swipe your card for everything that catches your attention. Instead, you’ll have to learn to distinguish between wants and needs. Mikayla from the University of Miami shares her thoughts on how to save money in college:
“When checking your statement, one can see how close they are getting to their credit limit in addition to where and how much they are spending. From my personal experience, seeing how much I could spend in two weeks while still feeling like I hadn’t bought much but seeing what I racked up on my credit card opened my eyes. It made me learn how to grocery shop better by getting ingredients for full meals that would last a few days instead of snacks and attempting to throw my favorite foods together for a night. I learned how to look for deals and decipher whether the item I wanted was a need or a want.”
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Mikayla B. University of Miami |
4. You’ll be able to make small payments
When people hear the word debt, they may assume huge student loans worth thousands of dollars, but debt doesn’t have to be that way. Credit cards are designed to be much easier for students to responsibly borrow money and are a great place to start on your financial journey. A student from the University of Nebraska at Omaha writes about her experience with paying her credit card payments:
“Beyond that, college students benefit from being taught financial responsibility with a credit card. Purchases made with credit must be paid off in a timely manner if one does not wish to accrue interest and have to pay even more. Thus, working college students can use these small scale debts to establish a system for paying off debt and being financially responsible so as not to become overwhelmed with debt due to inexperience later in life.”
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Helen A. University of Nebraska at Omaha |
5. You won’t be late on payments again
Many credit card applicants know that if they miss a bill or a credit card payment, there could be a charge in the form of a late fee. Some student cards have the option to set up an automatic payment cycle. This feature has been a lifesaver for many students, as it is one less thing to worry about during school. Plus, paying your bills on time could potentially lead to a credit limit increase. Iowa State University student, Shayna, offers her experience with auto-pay:
“Unless you get a place where everything is included in the rent, which is relatively hard to come by, automatic payments are a great tool. It can be difficult to remember when each bill needs to be paid, and depending on how the weekends fall, the day could vary. Having automatic payments was a lifesaver for me, especially when finals season would come around and I was incredibly busy. It’s easy to forget small things when you are stressed and working hard, so having one less thing to worry about through the automatic payments not only allowed me to focus better on my studies, but also to ensure everything was handled in a timely manner.”
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Shayna G. Iowa State University |
6. You can ditch the cash
Getting a credit card for college comes with many financial benefits, but it can also eliminate the amount of things you have in your purse or wallet. Having your plastic credit card allows you to free up room, while keeping you protected from theft and credit card fraud. For example, when you lose your wallet, you will most likely never see the cards and cash inside again, but if you lose your credit card, you are not liable for the purchases you didn’t give authorization to. Hear from Anjaly, a student at UPenn about the subject:
“In Philadelphia, I carry around pepper spray and try to avoid having too many valuables on hand. Credit cards alleviate the need to carry cash, and if the account is compromised, the credit card can easily be canceled.”
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Anjaly N. University of Pennsylvania |
7. You’ll need to find a financial balance
Credit cards make it easy to charge things. Because your credit card transactions aren’t immediately deducted from your checking account like a debit card, it’s easy to feel like the money you’re using isn’t real money. Eventually, your credit card statement comes in, and you realize that the money you are spending has to come from somewhere. Read Justin’s advice about financing his hobbies:
“For a while I barely used my card at all and my bills were quite low, but when the pandemic hit something changed and I developed several new hobbies that got me spending regularly for the first time in my life really. My hobbies are record collecting and vintage audio repair. It turns out fixing old machines is a very expensive hobby. I figured out recently that it is important to recognize the money tied to a credit card does come from somewhere. This summer, I stopped working and suddenly I found that my demand for accumulating things was unsustainable without any income...In order to alleviate surprises like this in the future, I am going to start physically keeping track of my income. Before I just assumed I would always have money. This was true until I started spending it. Suspending my job for the summer made it more obvious.”
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Justin A. Macalester College |
8. You’ll spend less time worrying about money
Even if your credit IQ is low, you probably know that college credit cards can be used for emergencies. Credit card issuers loan you money, and if you don’t have money in your checking account between paychecks, a credit card can make all the difference. Grace, a student from Baylor University, shares her advice on the use of a credit card in financial emergencies:
“During emergencies and periods of strife and adversity, money raised significant concerns. Unexpected trips to the emergency room for COVID-19, unanticipated vehicle complications, and unforeseen extreme weather conditions all interfered with my college experience. However, because I had a credit card, I could financially take care of these issues with ease... Credit cards relieved me of the burden of financial stress while allowing me to proceed with my college life. This financial reassurance provided me with the capabilities to persist in the face of adversity and to fulfill my endeavors as a pre-medical student.”
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Grace D. Baylor University |
9. You’ll understand your credit score
From secured credit cards to credit reports, there’s a lot of credit card terminology that you need to know as a cardholder. More often than not, students will get a card without researching which habits will increase their credit score and which actions can cause it to plummet. Frustrated with her lack of knowledge on the subject, University of Nevada student Xueying shares what she has since learned:
“A credit score represents the likelihood that a person will pay off their bill on time and ranges from 300-850. Several factors affect the credit score including the number of credit accounts, length of time having such accounts, revolving utilization, missed payments, and bank inquiries. Moreover, I realized that loans, including student loans, count towards your credit, which is why it is paramount to understand what you are borrowing extensively.”
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University of Nevada |
10. You’ll get to participate in more activities
Have you ever wanted to be a part of every activity on campus? Being involved sounds awesome until you realize that you have to foot the bill for all of those clubs and activities. Credit cards could help you keep track of all your spending, while lending you the funds to participate in more activities. Isadore writes about how credit cards help on college campuses:
“The added flexibility of a credit card allows you to spread out paying for important expenses, like extracurriculars. Clubs that involve traveling wrack up bills quickly, and being able to use one's credit card for the expenses makes it easier to pay for them, as opposed to keeping thousands of dollars in one's bank account at all times.”
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Isadore J. University of Connecticut |
After reading these pieces of advice, you might have a better idea of what responsible credit card management is supposed to look like and what it can help you with. Similar to how employers look at your resume before they offer you a job and determine your salary, lenders will look at your credit report before they approve you for a loan and determine your interest rate.
It’s a good idea to learn how to manage your credit early on in life, so those good habits will follow you into your adult life after college. Just like superheroes, you will have access to a great power with a credit card. Learning how to yield the power responsibly takes time, but it will help you tackle the costs associated with going to college with ease and create a stronger financial future for yourself.
