Key takeaways

  • Signing up for a credit card can be enormously tempting for college students — and there are plenty of benefits that go along with establishing a healthy credit profile early on.
  • However, easy access to credit can also get you into trouble if you aren't careful.
  • The following tips for student credit cards will help you manage your credit appropriately and set yourself up for a strong financial future.

College students have plenty to juggle, from classes to social activities and all the expenses that pop up in between. A great way to manage these expenses is with a credit card. When used correctly, credit cards can help students set the stage early on for a fulfilling financial future.

That said, not all student credit cards are the same, and some may fit the bill for your personal expenses better than others. However, keeping a few fundamental tips in mind when navigating your finances with your first credit card as a college student can get you on the right track fast. Here are five tips on how to use student credit cards to help you get started.

1. One card is enough

Once you’re at an eligible age to apply for a credit card, you’ll have plenty of options, but one card should be enough to handle your needs. Applying for multiple cards in a short amount of time and piling up credit inquiries can affect your credit score. Limiting your credit card usage to one card can make your credit-building journey easier to manage on a hectic student schedule.

To start narrowing down your options and understanding your approval odds (without extra hard credit checks), use Bankrate’s CardMatch™ tool.

2. Only spend what you can pay back

Remember that the credit limit your issuer determines for your card is borrowed money. Whatever you spend, you will have to pay back. Plan to pay your credit card bill in full each month on the payment due date to avoid added interest charges.

The best way to ensure you pay your bill and avoid interest is to only spend what you know you can pay back at the end of the billing cycle. You could also pay the minimum amount due, but be aware that you may be required to pay added interest, and those extra costs can add up quickly.

3. Always pay on time

It’s important to know how payment history affects your credit score. No matter how busy your schedule gets, make it a priority to pay your credit card bill. Payment history makes up 35 percent of your score in the FICO model. Since payment history accounts for such a large chunk of your score, it’s crucial that you always make your credit card payments on time.

You should also strive to pay your bill in full each month to avoid added interest and keep your credit utilization (FICO’s second most important scoring factor) low.

4. Build credit first, earn rewards second

You won’t be able to access the most sought-after credit cards later on without building good credit now. If you’re in college and you’re getting your first credit card, your primary focus should be to build up your credit history and a good credit score with responsible habits.

Rewards and benefits are a great perk of using credit cards, but they can quickly get distracting. Aim to get a card that offers tools and incentives that focus on credit building, such as payment reminders, credit score trackers and credit limit increases after demonstrating consistently good credit habits.

5. When in doubt, pick a student card

As a student, you’re afforded a valuable asset in the credit card market: the student credit card. Designed with students in mind, these cards offer benefits geared toward your needs. The best student credit cards usually have fewer fees, better APRs than credit cards for borrowers with no credit history and an option to upgrade to a non-student version after graduation.

The bottom line

A credit card can help you build up a good credit history and score early on, while also helping you to hit some of your biggest financial milestones quicker and easier. Good credit comes from consistently good habits, so always pay your bills on time, don’t bite off more than you can chew, start slowly, stay consistent and always focus on what matters most for your financial future.