Credit Cards

Building credit during college is important, but there are potential pitfalls. Before applying for a credit card, it is important to assess your level of responsibility and financial means. The credit decisions you make during college will affect your financial future.

Advantages of Credit Cards

  • Building credit: Making small purchases and paying them off every month will reflect positively on your credit report and credit score.

  • Learning fiscal responsibility: Living on a limited income is not easy, but learning to control your spending is a habit that will carry on for the remainder of your life.

  • A resource for emergencies: When emergencies occur (e.g., car repairs or additional textbooks), a credit card can help students cover unexpected expenses. When using a credit card for emergencies, have a repayment plan and stick to it!

‌Pitfalls of Credit Cards

  • Avoiding fiscal responsibility: Students who don’t have a solid understanding about credit cards often run up large amounts of debt that is difficult, if not impossible, to repay as a college student.

  • Damaging credit history: If a student does not use a credit card responsibly (e.g., missing payments, carrying large balances, etc.), these negative marks will appear on a credit report and affect credit scores. Damaging your credit while in college will make it difficult to be approved for a car loan, rent an apartment, and possibly obtain employment after college. If students do not feel they are ready for a credit card, it is much easier to establish credit after college than to fix credit after irresponsible usage during college.

  • A resource for luxuries: Students often mistake wants for needs, especially when a credit card is available. Credit cards make it easy for students to live beyond their means while in college, which negatively impacts them in the future.