Should College Students Apply for Credit Cards?

There is a fair amount of controversy surrounding the way credit card companies market to college students. I've heard stories about booths at beaches during spring break where intoxicated college students are enticed to sign up for credit cards and end up deeply in debt. I've had friends use their credit cards and spend more money than they had in their bank accounts. All this bad hype and irresponsibility gives credit cards a bad name. But careful research and responsible use can make your credit card the college student's greatest ally.

Credit cards are a great way for students to start building a good credit history. Many people come out of college without a job history and only student loans on their credit history. It is important that you can show banks and future employers that you can responsibly pay off your credit card each month. The earlier you start, the better.

The most important thing when applying for a credit card is to do your research first. There are many great student credit cards out there with relatively low rates, and low credit limits. Look for the one that fits you best. Rewards points, cash back, and frequent flyer miles are an important feature. Some student credit cards even offer points for good grades, and for paying your bill on time each month.

Only apply for a credit card if you can make the commitment to pay it off in full each month. Spending more money than you have and letting debt build up is counter-productive. Only use your credit card when you know you have the money to pay it off, or in a real emergency. Find some way of reminding yourself to pay it off each month. Setting up an online bill-paying system may be the easiest way. Connect your credit card account to your checking account so you can pay off your bill each month with the click of a button.

A credit card is a great way to learn about responsibility and economic independence. College students often know very little about personal finance. Researching, applying for, and using a credit card can be a useful tool for fining out more. And a long as you pay off your whole bill each month, the rewards points mean that you get something for nothing. It will be a pleasant surprise when you realize you've earned enough money from using your credit cards to help pay for your books for the semester. After a year of using my credit card, I am still debt free, I have built up my credit history, and I have earned enough points to redeem a $50 Target gift certificate. As a college student, I appreciate finding as many ways to save money a possible; I just never realized a credit card could help.