Is it smart to get a credit card for college to increase credit score? Honestly, I’d most likely use it like a debit card (in that I would pay for something and use funds I have in my bank account to pay the bill before the end of the grace period). Would this build credit/build enough to be worth doing?
Thanks!
I heard a financial journalist at a panel discussion last week and she advised not getting a credit card until you are a junior. There have been a lot of recent stories about college students (freshmen, in particular) racking up a lot of debt. But others may have different opinions about this.
If the student is responsible it is a good idea imo. Get a very low credit limit at first. Make sure it gets paid on time all the time.
How disciplined and organized are you? If you’re sure that you can limit your purchases to what you can pay off immediately, and that you won’t forget to pay the bills, it can be a good idea. You can set up automatic payments to prevent missed deadlines, too. But you have to be very honest with yourself. If you will be tempted at all to buy things like pizza on a credit card then I wouldn’t get one.
I think the credit card company will decide this on their own. A college kid with no major income getting their first credit card isn’t going to get a 10K limit.
You should make sure you have the money to pay immediately, and that’s not just for college, that’s for your whole life. Since you’re going to college, presumably you are literate, can do arithmetic, and have some basic sense which I would say are the requirements you should meet before you get a credit card. The big thing is just never carry over debt, make sure you can pay in full every month.
To help you out with one that may be appropriate: https://www.salliemae.com/credit-cards/sallie-mae-card/
As a college kid with a presumably very small income, you won’t get a high limit card. So racking up thousands of dollars of debt literally wouldn’t even be possible, short of letting the accounts go into delinquency. If you get something with a low limit and pay it off every month, it would definitely be good for your credit score. It would be great to have on hand in emergencies as well. Just use it responsibly. Using it as if it is a debit card and paying the full balance off every month is the best way to go about it.
It’s a good idea. You want to establish credit history as early as possible. When you go to buy a house and need a mortgage, it will be greatly helpful.
Even if you have one with high interest rates, as long as you pay it off every month it doesn’t matter. Besides, you probably aren’t going to start off with a very high credit limit either.
I think it’s a good idea if you’re responsible with it. I got a secured credit card last year as a sophomore through my bank. It has a $300 limit and I have a separate bank account with $300. I can make payments right from my banking app, and I honestly don’t use it all too often.
My bank said after a year of paying off my balance on time with that card, I can apply for a non-secured card through them. If your bank has a similar program, I would look into it.
You had to secure a $300 credit line? Did you ask for an unsecured line or did they just offer you that and you accepted it?
I would suggest to apply for a Discover Card the summer before you start college. As long as you have a job then you should be able to get one. Then connect it with your bank account for automatic payment. That’s what my daughter did and her credit limit went from 300 to 500 in 2 years.
Wouldn’t this be the exact use? As a debit card that you pay back with your own money for purchases such as meals?
In agreement with everyone here, use it as a debit card and pay it back. So long as you stay on top of it there shouldn’t be any problems. Never spend more than you can pay back as a college student.
I applied for one straight out of high school and got a $700 limit. The most I have ever used is $250 for items like plane tickets which I immediately repaid. It’s a great idea for large purchases like plane tickets, books, etc. At the very least start with those and pay it back immediately.
Ones with a rewards program like Airline miles are good. Put big ticket items on them and pay it off immediately. You get basically free miles/points for something you would have just paid cash for.
@Vladenschlutte : yep, I had to get a secure card if I wanted one on my own. I didn’t have anyone willing/able to cosign and the manager of my bank went over my numbers and said I wouldn’t have qualified for a regular one on my own, either. So, that was my only option, and I’m happy to at least be building credit.
I think it’s a great idea. Use it responsibly and you’ll build credit. As long as you use it for the convenience over cash and NOT as a way to spend money you don’t have you’ll be fine,
Do you have a job?
If not, then how will you pay those credit card bills every month?
@bjkmom yes I do have a job and will be increasing hours this summer.
I talked to my bank about it and they said if I come in with some money, I can do a secured card. I’ll probably do that after graduation or at least after AP tests. The weekends are for studying right now haha
I’m sure you should be able to get a non-secured no annual fee card somewhere. Possibly even from whoever you asked, if you just ask for a non-secured card. You might get a low limit like $500 on an unsecured card but still…
After kid #2 turned 18 she applied a credit card with Bank of America and got about $700-800 credit limit. She was denied from another credit card with super low interest rate. But yes it’s a good idea.