What attributes would you say the best student credit cards share?
Many would say that those credit cards offering cash back, rewards, and all sorts of perks are the best, but for students on a tight budget, first foremost, you want to make sure to get a credit card that doesn’t have an annual fee, ideally with a low interest rate.
What is the best way for a college student to use a credit card?
For any consumer, including college students, should try to use credit card for free. That means to pay off the full amount of balance each month within the grace period, instead of carrying a balance. As this is the way to accumulate positive credit history if you were to improve your credit score versus dragging it down.
What is the biggest mistake that college students make with credit cards?
I have noticed that some students think the amount of money that they can borrow through credit cards (the credit limit) are free money to use for them, but they don’t know that it’s only free when they can pay it back within the grace period (typically it’s about 21-25 days; the period between the last day of a credit card’s billing cycle and the minimum-payment due date). If you were only paying the minimum-payment, the remaining balance will be charged for interests every single month until you pay it off.
Another mistake that students sometimes run into is to max out their credit limit quickly. We strongly recommend students to use less than 30% of their credit limit, ideally staying under 10% considering the affordability of monthly debt payments.
What is your best piece of advice for a college student who is considering applying for a credit card?
Before applying for credit card, students should know that it is not smart to use credit cards to maintain a life style that they cannot afford with their checking accounts. Students should consider using credit cards as a way to practice responsible spending behaviors and to build their credit history in a positive way.
Should credit cards be easier or harder for college students to get (or is it just right)?
It does not matter when or how a person gets a credit card, I think what is most important for parents, educators, public media, and governments to do is to educate our young consumers to be responsible for their spending and to help them really understand the meaning, or maybe the consequences, of borrowing.
Ph.D., CFLE, AFC®, Associate Professor, Human Development and Family Sciences, School of Family and Consumer Sciences, Northern Illinois University
