Credit Card Tips for College Students
Learning how to manage your finances is crucial as a college student, including finding the right credit card and learning how to use it. With countless credit cards available, choosing the right one can be challenging. That’s why we’re here to help with the best credit card tips for college students to ensure you choose the right card and use it wisely.
Why Do You Want a Credit Card?
Before selecting a credit card, you need to identify why you want one in the first place. Here are some of the most common reasons for getting a credit card.
- Building Credit – Credit cards can be a great tool for establishing credit as you start your financial journey. Paying your credit card balance on time and in full demonstrates your financial responsibility to lenders, which can improve your approval odds for future loans like auto or mortgage loans. Our MyMoney MyWay® Visa® Credit Card is designed specifically for young adults seeking to establish and build credit.
- Earn Rewards – Some credit cards offer rewards programs as an added benefit. Not all credit cards provide this perk, so if earning rewards is important to you, choose a card that offers a rewards program that suits you. Rewards can include cash back, airline points, travel perks, discount programs, and gift cards you can redeem with your reward points. Enjoy the benefits of our Visa® Platinum Rewards Credit Card, including the Scorecard® Rewards Program that allows you to pick the best rewards for you.
- Making a Large Purchase – Credit cards can help you fund large purchases that would otherwise be challenging to make. Make sure you can qualify for a credit card with a high enough limit to cover the purchase and a lower interest rate. High interest rates can lead to substantial interest charges if you don’t plan to pay off the balance quickly.
What Should You Look for in a Credit Card?
Not all credit cards are created equal in terms of benefits and features, so do your research and compare different credit cards before choosing one. Here are some terms to keep in mind during your search.
- Interest Rate – Many credit card lenders entice you with a 0% introductory interest rate or APR. While this may seem like a great deal, make sure you can pay off your balance during the promotional period. Otherwise, you’ll be stuck with a much higher interest rate once the promotional period ends. Look for the lowest interest rate you qualify for to save more money in the long run.
- Annual Fees – Some credit cards require an annual fee for card usage. Fortunately, there are so many credit cards to choose from that you will be able to find plenty with no annual fee.
- Rewards – Determine if rewards are important to you, and if so, identify which rewards you’re most likely to use. That way you can find a credit card with a rewards program that works for you.
- Penalties and Other Fees – It’s critical to understand the penalties or fees associated with your credit card. For instance, some credit card companies may raise your interest rates for a single late payment, in addition to any late fees. Knowing how your credit card works is the key to making the most of your card without incurring penalties or additional interest charges.
What are Good Credit Card Practices to Keep in Mind?
Once you’ve selected the credit card that best suits you, keep these practices in mind to ensure you use your new card wisely.
- Pay On Time – The biggest factor in calculating your credit score is your payment history. Maintain a positive payment history by never missing payment due dates. Paying your credit card bill on time helps you avoid late fees and keeps your credit in good standing. Set up automatic payments to ensure you never miss a payment.
- Pay In Full – Paying off the full balance of your credit card eliminates interest charges. Unless you use your credit card to fund a large purchase you’ll pay off over time, you should only charge small amounts that you can easily repay at the end of each billing cycle.
- Pay More than the Minimum – Strive to pay more than the minimum balance due on your credit card. The minimum payment amount on your statement typically covers the previous month’s interest, fees (if any), and only a small portion of principal balance. By paying only the minimum, you won’t make much progress in reducing your overall debt. Paying less now means paying more later. When you can’t pay in full, pay as much over the minimum as possible to steadily pay down your debt and wipe out the balance.
Next Steps
If you’re ready to get your first credit card and start building your credit, we are committed to helping you every step of the way!
- Learn more about the Robins Financial Credit Union credit cards available to you.
- Make an appointment to speak with one of our member service representatives and they can help you decide which card will work best for you.
- Once you’ve decided, apply online or in a branch.
At Robins Financial Credit Union, our mission is to enhance the financial well-being of our members and community. We honor this commitment by providing educational content to help you make the most of your finances. Read our other blog articles to help you gain the financial knowledge you need to succeed.