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College Student Credit Cards

College student credit card information - details on what to look for in a college student credit card, debt warning signs, and tips on using your credit card. Learn how to build, establish, or repair credit with a student credit card...

Getting a credit card is a part of entering the adult world for many college students.
Credit cards can benefit students by helping them establish credit, or they can allow students to get themselves into serious financial trouble. According to the Federal Trade Commission and Nellie Mae, 83 percent of college students have at least one credit card, and the average student’s balance is $2,327. College students have to learn what to look for in a credit card, and how to use it wisely.

Credit cards can be beneficial to college students. Using credits cards is safer than using debit cards or electronic checks online, and credit cards may be safer to carry than cash when traveling or for emergencies. If students use them to make small purchases and pay off the balance in full each month, they can build a history of good credit. Students can use the opportunity to get a credit card as a time to honestly evaluate their wants and needs and create a budget based on their monthly income. Students should not use credit cards to spend more money than they make each month.

College students who do not use their credit cards wisely can quickly become overwhelmed by debt. According to the Penn State Office of Student Aid, if a student only makes the minimum payment on a credit card with a $3000 balance and an 18% interest rate, it will take the student 8 years to pay it off and cost him or her an additional $2,500 in interest, assuming the student does not make any more purchases with the card.

Though paying off high credit card bills can cripple a student’s budget, not being able to pay them off will damage a student’s credit report, which can affect the student’s ability to:

  • Get private student loans
  • Rent an apartment
  • Buy a car
  • Get a house
  • Find a job
  • Get a good insurance rate

Because using credit cards wisely is important to a college student’s financial well-being and future ability to make large purchases, it’s important to know how to find the best credit card:

  • Comparison shop for credit cards, looking for a card with no monthly or annual fees and the lowest fixed annual percentage rate (APR). Many companies offer 0% APR for the first 6 months or year, but after that the rates may become very high. A fixed rate is preferable to a variable rate because it will not increase over time. It is best to use a national credit card, such as a Visa, MasterCard, or Discover, instead of store cards.
  • Choose a card with a low credit limit until you have learned to budget and use credit cards wisely.
  • Find a card that will be easy and convenient for you to pay • sometimes a card through your bank may be ideal, or one that has easy online payment options. Some cards charge additional fees if you pay by phone or online.
  • Look for cards that offer incentives that may benefit you, like cash back, airline miles, or discounts that you can use, but never get or use a credit card just for the bonuses.
  • Read all the fine print, looking especially for information about extra fees or interest rate hikes.
  • Remember that if something seems too good to be true, it probably is. Watch out for scams.

Students also should be honest with themselves about their credit card usage, and seek financial advice if they have problems with their credit card use. Some indications that a student may not be managing his or her credit card well include:

  • You are making only the minimum payment, or missing payments
  • You are at or near your credit limit on your credit cards
  • Your average balance is over $1000
  • You don’t know how much you owe on your card
  • You have more than two credit cards, or get new credit cards to pay off ones that are at their limit
  • Your student credit card or loan requests have been denied
  • You are embarrassed about your credit card debt

Students must also be careful with their credit cards so that others cannot misuse their credit. Some ways to do this include:

  • Keep your credit card in a safe place; keep the number of your credit card company in a separate place and call it immediately if your card is lost or stolen.
  • Check your credit at least once a year and report anything that doesn’t look right. The government requires that the three major credit bureaus each give you a free copy of your credit report annually. You can access these by going to, calling 1-877-322-8228, or completing a request form and mailing it to: Annual Credit Report Request Service, P.O. Box 105281, Atlanta, GA 30348-5281.
  • Don’t let others use your credit card number • only give it out to people whom you are certain are legitimate vendors.
  • Read all receipts before signing them, and keep records of everything. If there’s anything you don’t understand in your monthly statements, call your financial institution to ask.
  • Thoroughly shred all credit card applications you do not accept, and be careful about sharing your personal information.

United States General Accounting Office, Report to Congressional Requesters, Consumer Finance: College Students and Credit Cards, June 2001 [online]
Indiana Department of Financial Institutions, Students and Credit Cards [online]
Indiana Department of Financial Institutions, A College Student Budget [online]
U.S. Senate Committee on Banking, Housing, and Urban Affairs, Hearing on "The Importance of Financial Literacy Among College Students," Prepared Statement of Professor Michael E. Staten, September 5, 2002 [online]
Penn State Office of Student Aid, College Students and Credit Cards: What You Need to Know [online]
Federal Trade Commission, News Release, “FTC in New York and John Jay College Teach Credit Smarts to NYC Students,” September 3, 2003 [online]