There is a lot of negativity out there about credit cards, especially when it comes to getting a credit card as a college student. And, it is true that you can get into trouble using credit cards as a college student if you aren’t educated about them — and if you don’t have the self-discipline to stay out of debt. If you don’t already have a foundation built on responsible financial choices, getting a credit card is a bad idea. However, if you have already proved that you can be responsible, a credit card might not be a bad thing for the student who wants to begin building credit and earning rewards.
Which Credit Cards are Best for College Students?
CardHub.com has put together a list of some of the best credit cards for students. It’s important to consider, though, that there are some relatively recent rules attached to getting credit cards. The Credit CARD Act of 2009 actually requires that those under the age of 21 be able to prove that they can make payments on the card before they are approved, or get a co-signer. So, if you don’t want to have to beg your parents to help you out with a credit card, you will need to get a job, and make sure that you budget appropriately to make payments.
Here are some of the cards on CardHub’s list:
- Citi Dividend Platinum Select Card for College Students: Includes a cashback reward on gas, groceries and drug store purchases. You get 5% for the first six months, and 1% after.
- Journey Student Rewards from Capital One: 1.25% cashback reward on all purchases — as long as you pay your bills on time.
- Discover Student More Card: 0% APR on purchases for nine months.
Really, though, if you can qualify for the rewards cards, those are the way to go. You can use them as great financial tools — as long as you are smart about it.
Being Smart About Credit Card Use
In order to put your rewards credit card to good use, you need to be careful and responsible. This means that your credit card use should fit into your budget. A credit card isn’t your money. This is one of the most important things college students need to know about credit cards. It’s borrowed money. If you don’t pay it back each month, you pay interest. And those interest charges, even if you have a low interest credit card, will overwhelm any rewards you get. This is why it’s important to only use your credit card to buy items that you can pay for right now.
You have to understand that a credit card shouldn’t be used to get items out of your reach. If you can’t keep those impulses under control, it’s best if you don’t have a credit card at all. The use of a credit card should be limited to buying regular items, maximizing your credit card rewards, so that you get the cash back. But you should never carry a balance and never pay interest. As long as you follow your spending plan, and have the discipline to live within your means, a student credit card can be a great thing.
Miranda is freelance journalist. She specializes in topics related to money, especially personal finance, small business, and investing. You can read more of my writing at Planting Money Seeds.