Your guide to responsible credit card use for college students

Jul 5, 2020

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I just graduated from college — and I can vouch that in my four years, I never learned how to manage my personal finances. For lack of a better word, you’re expected to “adult” as soon as you enter the workforce.

(Photo by Mario Tama/Getty Images)
(Photo by Mario Tama/Getty Images)

If you’re still in college, this is actually the perfect time to get a jump start on building credit. Owning your first credit card can be stressful, as you’re granted this newfound purchasing power. But if used correctly, credit cards can be incredibly rewarding.

From move-in to move-out day, you’ll have plenty of expenses throughout your time in school. By learning how to use a credit card on these day-to-day purchases, you’ll build excellent financial habits that will help you for the rest of your life.

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Beside establishing credit, your first credit card can help you lock in sweet rewards, from cash back to points and miles for future travel. And by the time you graduate from college, you’ll have several years of credit under your belt, that will help you secure future apartment leases, car loans and mortgages.

While some of these rules may seem more obvious than others, knowing the do’s and don’ts of responsible credit card use will help you build a solid financial future.

In This Post

Get familiar with the credit card world

There are so many credit cards to choose from that picking your first can be overwhelming. Do some research: It’s vital to select the best card for you and your lifestyle. Just because a friend raves about a card doesn’t mean it’s the right one for you.Since you’re reading this, you’re already off to an awesome start. TPG is dedicated to helping you make informed decisions, so start with our credit cards beginners guide and check out our wide-ranging credit card reviews. Once you get a rewards credit card, we’ll teach you all of the amazing things you can do once you start earning points and miles.

(Photo by bernie_photo / Getty Images)
(Photo by bernie_photo/Getty Images)

Starting out, you likely won’t qualify for the top rewards credit cards. For most college students, you may have a limited income from a part-time job, or possibly no income at all. But there are plenty of cards that are made exclusively for college students, with no annual fee and will help you start building credit. From restaurants to groceries to gas, having a starter college card will reward you for these everyday purchases.

Related reading: Best credit cards for college students

Manage your own finances

For most beginners, the first order of business will be building credit.

You probably have checking and savings accounts, but if your parents have been the ones managing them thus far, it’s time to ask for access. Seeing where your money is going and how much you have is key to becoming financially responsible and independent.

(Photo by Topalov/Getty Images.)
(Photo by Topalov/Getty Images.)

The same goes for credit cards. If you and your parents decide to start building your credit by adding you as an authorized user on their accounts, ask for account access. Some parents may not feel comfortable giving their child a view into the family finances, but they may want to reconsider. By allowing the authorized user to see where they stand against the card’s credit limit and what they’re earning on their spending, they will be motivated to be smarter with their purchases.

Related reading: Credit cards with the greatest value for authorized users

If you, the student, decide to open a credit card of your own, keep track of your spending and stay on top of your bills; both play a role in calculating your credit score. Set aside a few minutes to check your account several times per week — if not, daily. This will help you avoid missed payments and unnecessary charges from interest fees.

Set your own financial goals

Having a specific goal in mind will help keep you on track — and there’s nothing like the satisfaction of successfully reaching a goal.

Perhaps your goal starting off is to simply learn the basics of credit and build good credit card habits. In this case, you may not even need to worry about earning rewards, if your intention is to simply ease into the credit card world.

But if your goal is to collect enough points for your spring break trip, find out what you’ll need to spend to earn these rewards. You could earn enough points and miles just from your sign-up bonus, which will have a spending threshold you’ll have to meet in the first few months of ownership.

Remember that a credit card is not free money

When you get your first credit card, you have access to more spending power, but it’s not free and you’re responsible for paying it all back — in full every month.

If you’re new to the travel-rewards world, you’re going to want to get familiar with the 10 commandments for travel-rewards cards. Specifically, Commandment Number One: Thou shalt pay thy balance in full.

When you don’t and you keep an unpaid balance, interest will be tacked on. Most travel-rewards credit cards carry high interest rates — although a few offer 0% APR for an introductory period — so running up a balance will negate the value of any points or miles you earn. Finally, this bad behavior will take a toll on your credit score, hurting your ability to open cards or obtain a mortgage or other loan in the future.

Bottom line

Getting a credit card in college can be highly rewarding, as debit cards won’t offer you points and miles. From building your credit to earning points redeemable for spring break travel — the options are endless. However, all of this depends on being a responsible first-time credit user.

Related reading: How to check your credit score for absolutely free

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