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For many College students, college is their first experience with financial independence as they move out on their own and face their own “real world” expenses, from college tuition to monthly rent. Unfortunately, not many students are fully prepared for the sudden challenge of finances as they transition from someone that was likely fully dependent on their parents to someone that is mostly (or entirely) in charge of their own finances. Credit cards can be a no-brainer for any college student – when cash fails, a credit card can help pay for day-to-day expenses. However, if not properly researched and used correctly, credit cards can cause far more damage than good for one’s financial situation.

Are you considering getting your own credit card as a college student? Keep reading for what to know about getting a credit card in college.

Don’t spend more than what you can pay back 

As much as you want to swipe your credit card left and right to pay for all your college expenses, you do not want to use your credit card to overspend. A credit card is only beneficial if you use it to spend wisely – don’t use it to cover purchases you will not be able to pay off. For example, if you are making $400 on your paycheck a week, and are spending $600 on your credit card bill statement – you would be $200 short on your payment due. Missing that payment will negatively impact your credit score.

If you are signing up for a credit card in college, make sure you are at a point where you are financially responsible.

Build your credit 

As you work toward gaining financial independence, credit cards give you the opportunity to establish your credit and credit score. As you use your card and pay your credit card bill on time, it shows financial responsibility. This responsibility translates to your credit score — the more responsible you are, the higher your credit score will be.

Your credit score will greatly impact your ability to make larger purchases in the future. When you want to buy or lease a car or apartment/house, your credit score will come under scrutiny. If you have a lower score, you will be viewed as someone who is financially irresponsible and will have a more difficult time getting that loan or apartment under your name. On the other hand, a higher credit score will show that you are more financially responsible – you can pay back loans on time, pay monthly rent, and so on.

Search for cards that are geared toward college students

Consider what type of credit card you are looking for. As a college student, you may not be covering all the living expenses of an adult working a full-time job. You may be paying rent or covering gas for your on-campus car, but you may still be getting some financial help from your parents or financial aid.

Some credit cards are advertised as student credit cards. These often come with more flexible credit requirements – a major plus for college students that don’t have any credit history – at the cost of a lower credit limit.

Keep an eye out for cash-back features

Every credit card has varying offers regarding cash back, which you can use as a deciding factor on which credit card can benefit you. For example, the Discover It Student Cash Back card has 5% cash back on purchases at specified businesses that rotate each quarter – these can include Amazon.com, grocery stores, gas stations, and restaurants when activated. Cardholders will also get 1% cash back on all other purchases by default.

On the other hand, Capital One Savor One Student Cash Rewards Credit Card offers 3% Cash Back on dining and entertainment, popular streaming services, and grocery stores. Cardholders also get 1% Cash Back on all other purchases and 8% Cash Back on Capital One Entertainment purchases.

Develop a strategy 

When deciding which credit card to sign up for in college, consider establishing a spending strategy beforehand. Do you want a credit card to fall back on in case of emergency purchases outside of your planned budget, such as car maintenance? If you are using a credit card as your primary form of payment, make sure you plan to spend as much as you can pay back in the very near future.

As you use your credit card, you should also keep an eye on how you actively use your card. You may think you are not using it as often as you are, but a quick glance at your statement can account for a lot of your money going toward dining out and not basic living necessities. Fortunately many credit cards can offer easy-to-understand spend analyzers to show your spending, but you can always keep a record manually.

A credit card is not going to be the magical solution to all your financial woes. When you decide to get a credit card in college, it’s important to research prior to committing anything and figure out a strategy for how you are going to utilize your credit card. Good luck!

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