If you’re a college student, you’ve likely thought about getting your first credit card at some point. But is it smart to get one as a student? What’s the difference between credit cards designed specifically for students and standard credit cards and how can you be sure that you’re applying for the best credit card available to you? Here are some tips to help you decide if getting a credit card is a smart choice – and how to choose and use the right credit card so that your first foray into credit goes smoothly.

Pros of Having Credit Cards

The pros of having a credit card as a college student are numerous. Responsible use of a credit card can set you up for a much easier experience later on, especially in the time after college, when many graduates are finding jobs or applying for apartments and home loans. It is easy to put off thinking about credit history or mortgages while in college, but important life events that depend on your credit score can come up faster than you may expect – and having a solid foundation of credit means that you won’t be scrambling to figure out a way to improve your credit score when it is more essential later on. A positive credit score and established credit history can help with:

  • Approval for renting an apartment
  • Applying for loans and future credit cards (lower interest rates!) 
  • Better rates on car insurance
  • Lowered or zero deposit on utility services 
  • Background checks for employment

Cons of Having Credit Cards

The cons of having a credit card while in college are just as numerous as the pros, and are something to think about thoroughly before making a decision. College is notorious for being a period of time when it is important for students to be careful about money and many have a tight budget, so the lure of a credit card to pay for things using funds you don’t necessarily have can be nearly irresistible. Just as it is easy to put off thinking about aspects of your future that require solid credit history, it is also easy to avoid thinking about the consequences of irresponsible credit card use down the line. Some significant consequences of irresponsible credit card use are:

  • Quickly increasing debt – those billing cycles seem to go by very quickly and interest on credit card balance can multiply in no time
  • Low credit score, impacting jobs, loans, insurance, and much more
  • Risking not being approved for future credit cards based on past usage
  • Penalties and fees for not making payments on time 

This list isn’t exhaustive, but these are some important aspects to keep in mind when considering getting a credit card while in college!

Credit Card vs. Student Credit Card

The biggest differences between a regular credit card and a student credit card is that student credit cards will typically have higher interest rates and a lower credit limit, but have perks that are especially beneficial for students. 

Most students that are interested in getting a credit card have a goal of building up credit history, so making manageable purchases on a student credit card and paying them off on time each month is a great practice to achieve this. At the same time, the student credit card can have incentives, such as cash back on purchases from retailers that are popular with students or forgiveness for a certain number of late payments. Student credit cards often reward college students for using their credit card regularly and shopping at places they are most likely to make purchases anyway. 

A regular credit card typically has a lower interest rate and higher credit limit, but may be more difficult to get approved for as a college student and have less forgiveness on usage if any payments are late or mistakes are made with usage. In addition, many standard credit cards have an annual fee for usage, which is typically not the case with a student credit card. This doesn’t mean that a standard credit card should be completely discounted as an option though – it can still be a good choice depending on your personal priorities and what you plan to use a credit card for. 

How to Pick the Best First Credit Card For You

Clearly, there are many factors to consider when choosing a credit card, especially as a college student. It is important to think about what your motivation is for getting a credit card, explore your options, carefully read the fine print, and make an informed decision if you do decide to apply for one. Forbes’ breakdowns of best starter or student credit cards can be a great place to start your research:

The truth is there is not a one size fits all answer to the question of if it is smart for a college student to have a credit card. It can be a great idea if used responsibly, but can have detrimental effects later on if mishandled. 

If you are someone that doesn’t like to live within your means or has trouble resisting temptation on impulse purchases, it might not be a good idea to have a credit card. But if you know you can commit to only spending what you know you can pay off, make your payments every month and take full advantage of rewards, then having a credit card can be beneficial in building your credit score and increasing your spending power and opportunities in the future.

Do your research, consider your options, and make the most responsible choice for you personally. 

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