Credit Cards in College – What Every Student Needs to Know

By Sammy K

After graduating from high school, you’ll no doubt receive countless credit card offers in the mail. Credit cards are both beneficial and convenient, but can easily become a nightmare if not handled responsibly. Check out some pros and cons of carrying plastic below.

Having a credit card is good for emergencies.

Now, wanting pizza and not having cash does not constitute as an emergency. An emergency would be needing to have a car repair done, laptop repair, injury, etc. Things that can put you in a serious bind if you don’t have the cash on hand.

Having a credit account is applied to your credit report, which impacts your credit score.

Keeping your account current and paid on time will result in a positive addition to your credit report, but getting behind or not paying can really hurt you. Credit health is very important! With good credit, you can get approved for loans easier, get better rates on your loans, and you’ll eventually want to buy a house and probably a new car, right? Having the lowest interest rates will save you loads of money and your good credit will make the whole lending process a lot easier.

Like Ben & Jerry’s, Credit Cards come in many flavors.

Credit cards come in a variety of options, including student cards, so there’s options for nearly everyone. Some offer rewards, airline miles, or cash back. Check out what type of benefits your student card can give you.

Credit cards are typically needed to reserve a car or hotel room.

The cheaper chain hotels will typically accept cash or debit, but nicer and more expensive hotels will require a credit card to cover incidentals. Incidentals are charges you may incur during your stay (room service, ordering movies, phone calls, etc.) Some hotels will allow you to place a cash deposit before your stay, but that’s at least $200 out of pocket for you. Car rental services are the same in that they want a card that can cover damage to a vehicle and to ensure its return. Renting with debit usually costs more. Without credit cards, travel can become more expensive than necessary.

Having credit cards can increase your likelihood of being a victim of identity theft.

Inputting your card number and information on certain websites for purchases can be risky. There are options to help protect yourself from this, so don’t let that stop you!

Credit cards are a big responsibility.

They are not free money. You can’t go crazy and book your spring break and max out your card without having to pay it back. It may seem free at the moment, but believe me, it is not. Consider how much income you receive and what type of purchases you’ll be making. If you have a part-time job and make a few hundred dollars a month, small purchases such as food or coffee are easy to pay off. With every on time payment, you’re adding good points to your credit score. If you make a few hundred dollars a month and decide to make a large purchase, such as a vacation, you’ll be struggling to make the payments on time and this will impact your credit score negatively. Create a budget for yourself and be realistic about what you can and cannot afford. Your first credit card will usually have a smaller limit, say $300-500, and those small purchases that are easy to pay off can add up to many points on your credit score. You’ll not only extend the life of your credit card, but you’ll be showing your financial responsibility and credit worthiness. This shows your lender that you can be trusted with their money, and often allows you to graduate to a card with a higher limit.

Credit is crucial for financial health.

With bad credit, it’s hard to do a lot. It’s hard to get loans for major purchases such as a home, the interest rates are sometimes double to that of a buyer with good credit, and you’ll be spending a lot more out of pocket than someone with good credit.

The pros outweigh the cons when it comes to credit cards, but that scenario can easily be changed when they are not used responsibly. Follow these guidelines and make smart decisions when it comes to purchases and your credit. Don’t let your present affect your future, keep your financial health in check!

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