Like most students, college was a transitional period for me. I didn’t have a full-time job, so I didn’t think of myself as a proper adult. On the other hand, I did my own laundry. While college may be the first whiff of freedom you experience, it is also a herald of things to come: jobs to get, bills to pay, credit to build. By attending college, I was already working on the job-getting and bill-paying part. I decided to work on my credit score, too, using credit cards for students.
Should I Get a Credit Card?
Good credit is a must for many things: auto insurance, rental applications, and loan qualifications, to name a few. The longer your credit history (that is, the longer your good credit history), the better, so college is a great place to start building.
Of course, you should never apply for a card unless you know you are responsible enough to pay the bills. If you’re wary of debt or afraid that credit cards will tempt you to overspend, don’t get a card. After all, most of us already have student loan debt. There’s no harm in waiting a few years to get your first card.
How Do I Stay Out of Debt?
I made sure that I was never spending money I didn’t have. I used my credit card only to build my credit, and for serious emergencies.
Credit building means using your card regularly, and paying off the bills on time. I did this by using my card for my monthly cell phone plan. I would set aside money for my plan in my bank account; when bills arrived I was able write a check and send them off. I had no worries about extra debt, no fear of excessive spending, and I was still building my credit history.
Are There Student-Friendly Credit Cards?
Three things make a credit card good for college students: 0 percent introductory APR, low ongoing APR, and rewards.
- APR stands for annual percentage rate, which defines the percentage of interest you will pay on your balance if it is not repaid in full by a certain date. An intro APR of 0 percent means there will be no interest on repayments for a period of months after the credit card is issued. This gives you the leeway to make big purchases (e.g. furniture for your dorm or apartment), and have the time to pay them back.
- A low ongoing APR helps in case you end up carrying a balance on to the next month. Very rarely can students manage sky-high interest rates, and you don’t want your balance to shoot through the roof if you forget one payment.
- Rewards are usually in the form of a percentage of cash back on certain qualifying purchases, or points per purchase that you can redeem. Student-friendly credit cards will give you cash back on student purchases, such as textbooks.
Two of the best credit cards that combine these three features into one student-friendly package are Discover it for Students (0 percent APR for the first six months, 5 percent cash back and a low ongoing APR) and Citi Forward (0 percent APR for the first 7 months, a rewards system based on points that rewards good credit habits, and a low ongoing APR). Neither of these cards has an annual fee, another bonus.
Credit cards are a necessity in “the real world,” and credit cards for students are a great tool at college. Get your credit card early, form good credit habits, and watch your credit score rise.