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A college student debunks these 5 credit card myths

Jan. 23, 2021
8 min read
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Editor’s note: This is a recurring post, regularly updated with new information.

In the movies, college kids are always seen applying for their first credit card on a whim after not being able to cover an expense, such as spring break (this is how The Points Guy, Brian Kelly, got started). Not surprisingly, they end up in debt and have to come up with a way to fix the mess.

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However, that’s one of the common misconceptions young people have unfortunately learned: credit cards don’t have to become a financial burden. There are plenty of positive attributes and perks that you miss out on when you avoid credit cards and only stick to cash and your debit card. Below I outline other student credit card myths.

Credit cards only lead to debt

I got my first credit card, the Discover it Cash Back, during my sophomore year in college. Although my spending habits have always been a little more on the wild side, I never ran into debt because I followed the age-old rule: don’t spend what you don’t have. The information for the Discover it card has been collected independently by The Points Guy. The card details on this page have not been reviewed or provided by the card issuer.

Related: Ten commandments for rewards credit cards

Responsible credit card use will keep you out of debt and from negatively impacting your credit score. A lot of people see credit cards and think free money since the charges don’t have to be paid back right away. This is a sure way for you to acquire debt because what you don’t pay at the end of the month will have interest added on to it.

Credit cards also have a lot of benefits that you can access if you manage your spending right. Ultimately you can build credit that will help benefit you throughout life.

College students. Photo by @basakt via Twenty20
When you use credit cards responsibly, you can actually save money. (Photo by basakt/Twenty20

Young people can’t apply for credit cards

Most people don’t have any credit history in coming into their 20s, and it can be hard to know where to start when you may still be supported by your parents. There are plenty of student cards out there that are great for those who don’t have a credit history and may not have a steady income. Even those who have absolutely no credit at all can apply for secured credit cards when starting out.

Student cards often offer no annual fee and include incentives for paying your bills on time, such as extra cashback. The Discover It Student Cash Back card offers a $20 credit for having GPA of over 3.0.

Related: Best credit cards for college students

Getting credit cards will hurt your credit score

If you’re opening tons of credit lines and racking up debt on each one, yes -- credit cards will hurt your credit score. However, responsibly opening one card won’t do any damage. Your credit score is calculated by a few factors and opening a credit card is a small percentage.

Related: How does applying for a new credit card affect my credit score?

When you open a credit card, the company does something called a “hard inquiry” when they look into your credit. After applying for a credit card you can expect your score to drop by around five points, but don’t worry -- it’s not permanent.

Before you apply for a credit card you should probably first check your credit score, which won’t affect your score if you use the right tools. Checking your credit report is free from the three major credit reporting agencies once a year. During the coronavirus pandemic, all three are offering free credit reports once a week through April 2021. There are also plenty of apps that can help you track your credit score.

Credit cards should only be used for basic expenses

A credit card can offer many more perks than you may realize. From points and miles to savings on purchases on the various expenses, credit cards can actually save you a lot of money over time.

There are many cards that are great for everyday spending such as the Chase Freedom Unlimited card, which will reward you 5% cash back on travel purchased through Chase Ultimate Rewards, 3% on drugstore purchases and dining at restaurants, and 1.5% on everything else.

If you absolutely need to use a credit card to pay for an expense that you might not have the funds on hand for, make sure to do your research into which of your cards is best. Some cards have higher interest rates than others which can harm you in the long run.

Sitting next to a window, embraced by natural light, this determined young adult (mixed-race) woman is working from home on a tight deadline. She is leaning in and focused to finish her project. Prominent laptop computer, a reference book, and mug of tea on a natural-edged redwood slab table complete her workspace. A houseplant, pine cone, and candle sit on the window sill. Outdoors: yellow flowers, foliage and daylight are visible in soft focus. Young woman wears a cozy gray wool sweater and has dark brown, wavy hair. Natural light illuminates her workspace and her profile. She appears to be turning the page of the reference book, while reading.
If you have the right credit card(s), you can use them for essentially any purchase — not just basic expenses. (Photo by Justin Lewis/Getty Images)

You can’t earn points and miles as a student

Points and miles have never been at the forefront of my mind -- but they should have been. If I (along with my fellow students) had more information about how to utilize rewards programs, points and miles could have come in handy for all those spring break trips we’ve taken over the years. Points and miles can you free nights at hotels, airfare and much more.

Related reading: Funding your next college vacation with points and miles

Do your research and find a card that best fits your lifestyle. I frequently use Amtrak to get back and forth from school so the Amtrak Guest Rewards Mastercard could be a great way for me to gain points that will upgrade my travel experience.

As you build credit you may become eligible for more cards. Travel cards, hotel cards, airline cards and transferable points cards are some great ways to earn points and miles. The information for the Amtrak Guest Rewards World Mastercard has been collected independently by The Points Guy. The card details on this page have not been reviewed or provided by the card issuer.

Related reading: From no credit to free flights: An inside look at a 23-year-old’s credit journey

Bottom line

Credit cards can be a great tool for college students looking to maximize rewards that can help to elevate their college experience. As a young person remember, credit cards are not your enemy. With proper usage and a class or two on financial literacy, you can build credit and become a (responsible) credit card master in no time.

If you’re ready to dive into the world of credit cards, points and miles make sure to check out TPG’s beginner guide.

Further reading for college students:

Featured image by Getty Images
Editorial disclaimer: Opinions expressed here are the author’s alone, not those of any bank, credit card issuer, airline or hotel chain, and have not been reviewed, approved or otherwise endorsed by any of these entities.

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  • For a limited time, earn 80,000 bonus ThankYou® Points after you spend $4,000 in purchases within the first 3 months of account opening
  • Earn 3 Points per $1 spent at Restaurants and Supermarkets
  • Earn 3 Points per $1 spent at Gas Stations, Air Travel and Hotels
  • Earn 1 Point per $1 spent on all other purchases
  • Annual Hotel Savings Benefit
  • 80,000 Points are redeemable for $800 in gift cards when redeemed at thankyou.com
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TPG Editor‘s Rating
Card Rating is based on the opinion of TPG‘s editors and is not influenced by the card issuer.
4 / 5
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Rewards Rate

3XEarn 3 Points per $1 spent at Restaurants and Supermarkets
3XEarn 3 Points per $1 spent at Gas Stations, Air Travel and Hotels
1XEarn 1 Point per $1 spent on all other purchases
  • Intro Offer
    For a limited time, earn 80,000 bonus ThankYou® Points after you spend $4,000 in purchases within the first 3 months of account opening

    Earn 80,000 ThankYou® points
    60,000 points
  • Annual Fee

    $95
  • Recommended Credit
    Credit ranges are a variation of FICO© Score 8, one of many types of credit scores lenders may use when considering your credit card application.

    670-850
    Excellent, Good

Why We Chose It

The Citi Premier’s 3 points per dollar spent across a wide range of popular categories is one of the more lucrative offerings in the world of points and miles. The Citi Premier comes with a $95 annual fee and is currently offering a solid sign up bonus of 80,000 points after you spend $4,000 on purchases within the first three months. It also has some valuable transfer partners to make the most of your rewards. Add in access to Citi Entertainment plus a $100 hotel credit for any single-stay hotel booking that exceeds $500 or more, excluding taxes and fees, booked through the Citi travel website, there are few reasons why the Citi Premier should not be in every traveler’s wallet.

Pros

  • Earns 3x points on restaurants, supermarkets, gas stations, air travel and hotels.
  • $100 annual hotel savings benefit (on single hotel stay bookings of $500 or more, excluding taxes and fees, booked through thankyou.com)
  • Points transfer to 16 airline programs, from JetBlue to Virgin Atlantic.
  • World Elite Mastercard benefits, extended warranty, damage and theft protection.

Cons

  • $95 annual fee
  • Lacks travel protections that other travel rewards cards come with
  • For a limited time, earn 80,000 bonus ThankYou® Points after you spend $4,000 in purchases within the first 3 months of account opening
  • Earn 3 Points per $1 spent at Restaurants and Supermarkets
  • Earn 3 Points per $1 spent at Gas Stations, Air Travel and Hotels
  • Earn 1 Point per $1 spent on all other purchases
  • Annual Hotel Savings Benefit
  • 80,000 Points are redeemable for $800 in gift cards when redeemed at thankyou.com
  • No expiration and no limit to the amount of points you can earn with this card
  • No Foreign Transaction Fees on purchases