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15 Important Credit Card Tips for College Students

Young people should be building up good credit history and good credit habits around credit cards right from the start. For college students, understanding the basics is absolutely critical. Here's some basic but important tips that will help you out.
Author: Andrew O'Malley
Andrew O'Malley

Writer, Contributor


Andrew O’Malley has a BSc in Economics and Finance. He has worked in the finance industry as a risk analyst and is now pursuing a career in writing. In recent years, he has written for a number of leading publications. He studied Economics and Finance and has been fascinated with the financial markets since his teens.
Interest Rates Last Update: September 20, 2023
The banking product interest rates, including savings, CDs, and money market, are accurate as of this date.
Author: Andrew O'Malley
Andrew O'Malley

Writer, Contributor


Andrew O’Malley has a BSc in Economics and Finance. He has worked in the finance industry as a risk analyst and is now pursuing a career in writing. In recent years, he has written for a number of leading publications. He studied Economics and Finance and has been fascinated with the financial markets since his teens.
Interest Rates Last Update: November 1, 2023

The banking product interest rates, including savings, CDs, and money market, are accurate as of this date.

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Table Of Content

The most important thing that you should know before you even get started is that credit cards are a loan, not free money. You’re going to be required to pay that money back and that’s why it’s so important that you don’t spend more money than you can afford.

Those who don’t take care to spend responsibly are going to have a lot of problems with their credit score later on and that credit score affects a lot.

1. Use Credit Cards to Build & Improve Your Credit Score

If you know how to use your credit cards properly you’ll be able to actually increase your credit score.

That will allow you to get even more credit in the future. But you have to make sure you’re following the right steps and that starts with paying your balance in full every month. For those who don’t have credit yet or for those who have bad credit already it’s a good idea to start with a secured credit card that will help you along.

Now, for those who are just starting to look for a job and don’t have any credit you absolutely still have options. You have the ability to open a student credit card, for example, even if you don’t have an income. You’ll need to be a student and have a parent co-signer, but these can help you immensely.

For those who aren’t attending school you can possibly get a secured card. That secured card will allow you to put a deposit into an account and then you’ll be able to spend that amount of money on the card. 

You actually get a review from the company in charge of the credit card and they can transfer your card to a standard credit card at a later point. So it’s like riding your bike with training wheels before you get ready.

Applying for a credit card without hurting credit score
Use Credit Cards to Build & Improve Your Credit Score (Photo by ilikeyellow/Shutterstock)

2. Choose The Right Card For You

You should know that getting one credit card is not the same as getting another one.

You need to do some research and make sure that you’re getting something that works for your needs. This could mean a cash-back card that can be used anywhere if you tend to use cards at different places.

For those who do most of their buying at one place, you could get a card that will give you the most rewards at that place. If you aren’t so good at paying off your debt every time you may want to look into lower interest rate cards. And so on.

3. Know What You Can Afford

It can get tempting to just keep spending on your credit card and assume that you’ll pay it off later when you’ve graduated. Unfortunately, you can end up extremely far in debt before you get the money to pay these off.

And when 30% of your credit score will come from the amount of debt that you have. If you’re not getting that card paid off every month, you’re going to have a lower credit score.

You want to make sure that you aren’t getting into the cycle of more debt and more problems.

Instead, make sure you pay attention to how much money you can afford to put back on that credit card each month and go from there. You’ll need to keep track of how much you spend and how much you make in order to make this work. And you’ll need to follow that limit. Don’t get sucked into overspending no matter what it is you want to buy.

student order with credit card
Know what you can afford is a key for building a credit as a a student (Photo by vectorfusionart/Shutterstock)

4. Watch the Fees

You’ll find that there are all kinds of fees associated with your credit card and you need to be aware of them. In fact, research has found that interest and fees cost Americans over $163 billion in 2016. And that’s exactly where credit card companies are starting to make more money off of you.

You want to make sure that you know where the fees come from, how they can be charged and definitely how much they can be.

Annual fees could be $95 to $200 or they could be $1,000 or even something higher. Luckily, you don’t have to get a credit card with these types of fees.

You can get cards with no annual fees or you can get annual fees waived in some cases if you talk to the company. You just have to make sure you’re aware.

When choosing a credit card, one of the things you need to consider is the free structure. In this chart compiled with data, we can see that late payment fees are the most common type of fee. This is followed by cash advance fees. At the other end of the scale, we can now see that over limit fees and annual fees are far less common. This highlights the importance of making payments on time, which can not only save on fees but help you to establish a solid credit history.


5. Don’t Look for an Easy Out

Once you get out of the house it’s up to you to take care of your own fees and your own credit cards. That means you shouldn’t be relying on your parents to do these things for you.

After all, they have their own things they need to pay for. If you do ask them for help or you do ask them for a loan you’ll want to make sure that you’re doing everything you can to come to an agreement in order to take care of things, immediately.

6. Make Payments Automatic

If you set up automatic payments you don’t have to worry about things like ‘I forgot.’

This is going to make it easier for you to stay on top of things and make sure that your bills are getting paid. In fact, you get to set up the right date and then you get to link them to your bank or to a credit card (as long as you pay it off every single month).

If you make payments through the online account of your bank you can make sure that you’re never late. And you can also make sure that you don’t have to go through late arrival for those bills you mail out. Plus you have the level of recordkeeping that you actually need.

7. Use Balance Alerts

If you have the balance alert activated on your credit card you’ll get a text if you spend more than a preset amount on your card. This can make sure that you know what you’re getting into and that your statement isn’t going to look worse than you expect.

These limits can be set on your own or they can be set by the company themselves. The best way to go is to keep it around 30% of the total limit on the card.

8. Keep Your Credit Utilization Low

You never want to max out the amount of money your credit card offers you. Rather, you want to make sure you have a balance of less than 40% on your credit line at any specific time. If it's not the situation – you should work on lowering your credit utilization rate.

If you have a high balance you’re also going to be paying a lot more on interest and that’s going to keep building up and up.

This chart created with Experian data shows that those with an average to good credit score have an average credit utilization ratio of the optimum 33%. This ratio drops significantly for those with very good and excellent scores.

At the other end of the scale, the chart shows that those with poor credit scores typically have a very high credit utilization ratio, with an average of 73%. This will be a massive factor in lending decisions for those in this group.


9. Prioritize Repaying High-Interest Debt Over Other Spending

According to Rahimi, repaying your high-interest debt is much more important than almost anything else.

That is easier said than done for many, but it is very important to stay on top of your finances if you carry credit card debt.

Sometimes carrying credit card debt is inevitable, however, having a plan on how to repay it as fast and cheaply as possible could help reduce the stress associated with carrying debt and save a lot of money in interest payments.

10. Avoid Late Payments

Late payments are going to make a big difference on your bills because they’re going to rack up the bills. You’re going to end up with late payment fees, fines, penalties and interest charges. You’re also going to have problems with your credit report and credit score as a result.

For those who struggle to make payments on time you can set alerts for your phone that will make sure you’re notified before it happens. You’ll also want to put something on your calendar to help you. You’ll also want to take a look at online settings to see if you can make automatic payments on your bills instead. This will keep everything from being late.

11. Use a Secured Credit Card to Build Your Credit

For those who have no credit or would have a problem getting credit you can definitely get a secured card. These allow you to start building up a credit score, which is going to make it easier for you to get the loans and other types of credit that you need later on.

Just make sure that you make all of your payments on time or you could end up in more trouble rather than improving anything.

12. Don’t Get a Cash Advance

Cash advances may sound great because they give you the opportunity to take out cash, but that actually makes things worse instead of better.

You want to make sure that these cash advances are avoided at all costs because they have a whole lot of fees and they have immediate interest charges when you pull the money out.

13. Analyze Your Spending Effectively

Did you know that your online banking system likely has a feature that will look at where you’re spending money and just how much you’re spending. It pays attention to the different categories that people spend in, like restaurants or travel. Even better, you can take a look at your patterns and you can also take a closer look at your monthly spending.

When you get into the online system make sure that you pay attention to what’s available and definitely check out this spending tool. You will be more than happy with how it helps you stick with a budget.

14. Protect Your Identity

Going online is going to make it difficult to keep your identity private, but you need to do everything you can.

Change out passwords and even usernames for some of your favorite sites. You should be doing this relatively frequently and you should never write down the passwords, or if you do you should make sure you keep them locked up. 

Also, make sure that you don’t have saved logins on your devices because they can easily fall into the wrong hands and then you’re in big trouble. Make sure you’re not providing information over the phone whenever possible either.

15. Keep an Eye on Credit Reports

You want to make sure that you’re paying attention to your score and everything that your report is saying.

For example, a lot of people think that they can get a higher score a lot faster if they start opening up a lot of accounts. That’s definitely not a good idea because it’s actually going to make it even harder for you to keep your credit score where you want it.

The key is understanding the difference between a soft and hard inquiry.

A soft inquiry happens when you get prescreened for an offer and it doesn’t hurt your score. A hard inquiry, which happens when you authorize a business or entity to check your credit score does affect you.

And that hard inquiry affects your score whether you get the credit or not. The reason is that it looks like you’re applying for too much and that you may just be trying to pay off expenses you can’t afford.

Keep in mind that an inquiry, and specifically a hard inquiry, can account for approximately 10% of your total credit score. And the more hard inquiries you have the worse it’s going to look. That could actually affect your credit score by quite a bit, lowering the score by several points. 

And that could mean that you don’t get the approval that you’re looking for, especially when you’re trying to get a loan or a specific type of credit.

You look like you’re not solvent or like you don’t have any other way to pay off your expenses when you start applying for too many things and start lowering your credit score over and over with those hard inquiries. You want to avoid this if you need any type of credit. 

What is the Fastest Way to Build Credit?

  • Pay your bills on time: If you fail to make a payment on time or delay, any strategy to improve credit will fail to work. Why? Because your payment history is one of the biggest factors to affect your credit score. Plus, late payments can remain on your report for 7 ½ years.
  • Make payments often: If you are in a position to make smaller payments (known as micropayments) during the month, doing so will help you in reducing your credit card’s balance while improving your credit. And if you make several payments throughout the duration of the month, it will affect your credit scoring factor, known as credit utilization. Following your payment history, this is yet another aspect that can have a huge effect on your overall score.
  • Request higher limits on credit: Whenever your current credit limit goes up, and your balance stays the same, it immediately reduces your credit’s overall utilization rate, thus improving your personal credit.

Now, if you know how to use them properly you can get some great benefits from your credit card. You can get rewards and cash back and even improve your overall credit score. You just need to make sure you’re doing a little work and comparing things like benefits and APR before you jump in.

So, let’s get into our best tips to help you use those credit cards the right way.

Credit Card for College Students FAQs

Can someone use my credit card without CVV?

Yes, but only under the right circumstances. For instance, if your card is stolen and the thief uses your card at a check-out terminal in a store, they will not be prompted to provide the CVV. However, if your card number is stolen without the CVV, your card can’t be used to make online purchases and the like.

The CVV provides additional security for online purchases. But most in-person purchases can be made without the need for the CVV.

Your first step in establishing credit history should be to obtain an account. Unless you already have credit history, you will not get a credit report. Moreover, you won’t be able to obtain credit history before you open a minimum of one account in your name.

Any time you open up credit accounts, lenders may report each account to the various Credit Bureaus (for example, TransUnion, Experian, and Equifax). This occurs after your first settlement cycle, which is typically within a few months after you open the account.

However, not every lender reports such accounts to these bureaus. Therefore, you have the opportunity to confirm in advance with the credit company you applied for.

Canceling a credit card usually has a negative impact on your credit score. That said, in some cases, it makes sense to get rid of credit card accounts. Keep in mind that during the recession caused by the pandemic, banks and credit card issuers are increasingly restricting credit.

During these times, maintaining existing credit is usually a good idea. If you have a good credit score and good finances, you should stick to a credit card and use it only occasionally to buy cheap things.

The annual fee is what you pay each year to obtain credit card privileges. Although many cardholders are firmly opposed to paying any type of fee, it may actually be worth it. The annual fee for travel credit cards is very common, and it tends to provide higher sign-up bonuses and richer rewards compared to cash back cards.

Moreover, when you transfer debts from one credit card to another, a balance transfer fee will be charged. The typical fee is 3% to 5% of the transfer amount.

Many cards offer 0% interest on balance transfers of a year or longer, but you must decide whether the interest saved can cover the transfer fee.

When you use a credit card to borrow cash, you need to pay the cash advance fee. As such, you should compare these rates to help you determine if they are worth the cost.

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Andrew O'Malley

Andrew O'Malley

Andrew O’Malley has a BSc in Economics and Finance. He has worked in the finance industry as a risk analyst and is now pursuing a career in writing. In recent years, he has written for a number of leading publications. He studied Economics and Finance and has been fascinated with the financial markets since his teens.