Have you ever asked yourself this question: “Should I get a credit card in college?”
If you’re careful and understand what getting a credit card entails (interest rates, minimum payments, etc.), the answer is probably yes.
Getting a credit card in college can have a lot of benefits. In fact, college can be the best time to start using a credit card.
Keep reading to learn the advantages of getting a credit card in college and what you need to know before you do.
The Problem with College Students Getting Credit Cards
Because lenders know most college students are excited to start their adult lives on their own, they target these young people. A lot of college campuses have several credit card vendors that make it easy for students to sign up. They may even give out free gifts to entice people to do so.
For most students, these credit cards are the first ones they ever have, and that’s where the problems come up.
Most students know they have to pay back the money back, but they may not understand (or pay much attention to) things like card features, interest rates, or terms.
But if they don’t understand these things, they are set up to fail right away.
The Trouble with Paying the Money Back
To top it all off, college students may not be prepared to pay the money back.
Most students have either low-paying or part-time jobs, so though they understand they have to pay the money back, they may not actually be able to do it.
Things like minimum payments and high-interest rates can ruin a college students credit score. And if their credit spending gets out of control, it can throw them into some major debt early on.
This is why it can be difficult for college students to keep up with credit card payments.
Why College Students Need Credit Cards Anyway
Despite the potential dangers of getting a credit card, most college students need them. They give students a way to pay for things they may not have the money for right away, like books and other school supplies.
If the student understands their credit card and is able to pay the money back, getting a credit card in college can be a valuable tool.
The Advantages of Having a Credit Card in College
Getting a credit card while you’re in college can set you up well for the future. Not only that, if you learn how to handle a credit card while you’re a student, you’ll be better equipt to deal with students loans after college.
Here’s a quick look at some of the other advantages that come with owning a credit card while you’re in college.
1. Build Credit Early
Having a high credit rating can open the door to opportunities you wouldn’t have without it.
For example, you can’t get your own apartment (or house) or buy a new car without a good credit score. If you’re working toward moving out of your parents’ house and becoming self-sufficient, having a good credit score is an important part of that.
Different people, including employers, cellphone providers, and landlords may want to look at your credit history during a background check. But if you don’t have a credit card, they won’t be able to find anything.
Having a good credit score early on will give you an advantage over other recently graduated college students.
But start out small.
You have to use your credit card to build a credit score, but instead of using it to make large purchases, save it for smaller things at first. Make sure you pay off your balance at the end of every month.
2. You Can Get Rewards
If you pay off your balance every month, you may be able to take advantage of rewards, like cash back. You can even earn travel rewards, like airline miles, which could be helpful if you spend a lot of time on a plane flying home.
But don’t make rewards your main priority.
It usually takes a lot of credit spending to earn a lot of rewards, like enough points for flights to and from campus.
Instead, focus on finding a credit card that doesn’t have any fees. When you find one that also has good rates, you can start looking into cards that offer rewards.
3. It’s a Good Teaching Tool
When you get a credit card, you have to start thinking about budgeting to make sure you have enough money to pay back your balance and make the minimum payment at the end of the month. For many college students, this is their first experience with a consistent bill.
This sets you up for handling other adult responsibilities in the future. It will give you some financial experience before entering the world of responsibility.
Getting a credit card in college allows you to build clean credit report and teach you how to construct good financial habits. These two things can then help you reach your goals in the future.
4. It’s Good for Emergencies
If something serious comes up, like a hospital visit, a car accident, ect., a college student may not have enough money in their bank account to pay for it. But if you have a credit card, you don’t have to worry about unplanned expenses.
Put together a plan that’ll help you pay back these emergency expenses as soon as possible.
Just remember, save the credit card for real emergencies, not things you could otherwise pay for.
Should I Get a Credit Card in College?
If you understand what getting a credit card means and are financially able to pay for it, getting a credit card in college can be a great way to start off your adult goal. Just make sure you’re really ready for one.
If you don’t have a job, don’t have a checking account, or have never paid any bills before, this may not be the best option for you.
So should I get a credit card in college? Go take a look at some of our services and find out how we can get you set up.