The cost of being a college student certainly adds up quickly. At times, you may not have enough money saved for all of your day-to-day expenses. In these instances, a credit card can be an extremely beneficial tool when you're waiting on a paycheck. However, you'll want to know how to properly wield this tool before you jump right in. Below are 10 credit card tips for college students to help you learn vicariously through students who have already experienced these credit card lessons.
1. You’ll learn about financial responsibility
In the time between signing up for a credit card and after your account is open for more than a year, you will learn a lot about financial responsibility. However, there is no better time to build credit than when you’re young. Rachel offers her advice on the learning experiences of credit cards for college students:
“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 a 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 purchase something with your credit card, there's a grace period. This means that you won't have to pay for any of your credit card transactions until the due date on your statement. Caleb from Michigan State University shares how grace periods help him fit his expenses into his college student budget:
“Credit cards usually allow a month before repayment is required--a huge advantage for someone who’s 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
Credit card companies give you a credit limit when you apply for a credit card. Because you cannot spend more than your 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… 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 first think of student loans, but debt isn't only large looming loans. Credit cards are designed to be much easier for students to borrow money responsibly and are a great place to start building your positive payment history. A student from the University of Nebraska at Omaha writes about her experience with paying her credit card bills:
“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 later in life due to inexperience.”
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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. However, setting up automatic payments has been valuable for many students. Plus, paying your balance in full every month on time could eventually 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 can free up room in your purse or wallet, while keeping you protected from theft and credit card fraud. For example, when you lose your wallet, it’s possible you’ll never see the contents 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
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 finding balance when financing his hobbies:
“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 credit cards can be used for emergencies. If you don’t have money in your checking account between paychecks, a credit card can help ease the blow. Grace, a student from Baylor University, shares her student credit card advice for handling financial emergencies:
“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 to cash advance fees, there’s a lot of credit card terminology that you need to know as a cardholder. Students often get a card without researching which habits will help them achieve a good 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
Being involved in multiple activities on campus sounds awesome until you realize that you have to foot the bill for all 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.”
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Isadore J. University of Connecticut |
After reading this advice about credit cards, you might have a better idea of what credit card management is supposed to look like. It’s more than just navigating annual fees and interest rates; you have to actively practice good credit habits as a student so you can benefit from those habits in your adult life after you graduate. But for now, your credit card will help you tackle the cost of attending college effortlessly and create a stronger financial future for yourself. Good luck!
