Is it a good idea to have a credit card during college?

Many new college students need to begin to pay for their own bills and miscellaneous items once they move out and begin their post high school education, which is why a credit card may be tempting for many of them. College students are just coming of age to be able to apply for a credit card, but many do it for the wrong reasons.

Having a credit card while attending college is actually a great thing to do, but only if the student has the ability to be responsible with how they use it.

Benefits of having a Credit Card in College

Once a child turns eighteen, they are given a credit score which starts out as a big fat 0! A new college student has absolutely no credit to their name because they have never had the opportunity to build up credit. Up to this point the student’s parents have been responsible for all their financial affairs. Now that they are 18 they have become responsible for their financial affairs.

Now that they are 18 they have become responsible for their financial affairs. While this can be a huge negative for some young adults, it is seen as an opportunity for others. Some young adults use this opportunity to apply for a credit card. They do this so that they can build up credit over time. This does not mean that the student goes out and buys a bunch of items with their credit card; instead it allows the student to spend only a few dollars a month so that they can pay the credit card company at the end of each month. This builds up credit every month, which students will find beneficial later on in life.

Why is having a Credit Score Important for College Students?

As a college student, you are beginning a wonderful journey known as “life”. Along this journey you will find that there are some things that you need that are far beyond your budget. For example, you may find that you need to buy a car. The car is a necessity so that you can get to work, or any other important place of interest. Buying this car will mean that you have to take out a loan. The very first thing that will be looked at while in the process of taking out a loan is your credit score. Seeing that you have a great credit score, built up over time while attending college, you are approved for the loan!

Warnings for New Credit Card Wielders

While holding this shiny new card, keep in mind the possibilities. While you may have a great deal of money that is only a scan away, you will have to pay this back. Not only will you have to pay the original amount back to the credit card company, you will also have to pay interest. Interest is the extra money you will pay to the credit card company, which is how they make their money. Only use your credit card for small purchases, as this will be the first step to building up your credit score!

Adam Greene is a financial writer earning his masters of taxation degree online.


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