Credit Cards

Learn More about Credit Cards

Most college students report experiencing financial stress. With rising tuition costs, ballooning student loans, and the pressures of a tough job market, building credit might be the last thing on many students’ minds. According to a 2019 survey, Americans open their first credit card at around 20 years of age. Credit cards for college students can help ease financial stress — when used correctly.

A 2019 whitepaper found that only half of college students with a credit card pay off their bill in full. This financial mistake can cost borrowers for years. Our credit resources explain how to build credit while in college and avoid the pitfalls that can come with student credit cards.

What is a Credit Score?



A credit score represents a borrower’s likelihood of paying back loans. Borrowers receive a number between 300-850 based on their borrowing history, credit history, and total debt. Missed payments, closing old accounts, or borrowing close to the credit limit all negatively affect the credit score.

How to Build Credit While in College

In 2019, 57% of college students used a credit card. Building credit history while in school helps graduates transition into the workforce with strong financial footing. Paying off the balance in full increases the credit score and prevents interest from accruing.

However, missteps can hurt college students for years. The average 2019 credit card debt of $6,300 would take borrowers 17 years to pay off with just the minimum monthly payments. They would also end up paying $5,800 in interest.

Learn more about building credit in college.

What Type of Credit Card Is Best for Students?



Credit cards come in many different types. Some charge an annual fee for the card, while others offer different rewards and perks. When researching credit cards, prospective applicants should look at the annual percentage rate (APR), and any fees. Students without independent income or first-time applicants often benefit from options like student credit cards, secure cards, or authorized user status.

Learn more about the best credit cards for college students.

How to Boost Your Approval Odds

In October 2020, more than 20% of credit card applicants received a rejection. How can you boost your approval odds? First, college students and first-time applicants should avoid applying for cards with restrictive requirements. Instead, focus on cards with a higher approval rate. Second, avoid submitting too many applications. Credit card companies check applicants’ credit score, and a high number of hard inquiries can hurt your credit score.

Learn more about increasing your approval odds on credit card applications.

How Do Student Loans Affect My Credit Score?



Taking out student loans helps borrowers build credit history and increase their credit score. For instance, making regular payments on student loans improves your credit score. However, student loans can also hurt credit scores if borrowers miss a payment or the loan goes into delinquency. Keep in mind that student loans do not affect credit when inactive — for example, during school or a deferment period.

Learn more about the relationship between student loans and credit scores.

Why Should I Care About Credit?

Credit affects college students’ lives long after they graduate. Credit scores make a difference when applying for a car loan, qualifying for a mortgage, or even applying for an apartment. A higher credit score facilitates borrowing money to start a new business or making major financial purchases. A strong credit history also translates into lower interest rates on loans.

Understanding credit early helps college students avoid the long process of rebuilding credit after missed payments, loan defaults, or bankruptcy. By paying attention to credit, students can get through college with more financial freedom and less stress.

Portrait of Genevieve Carlton

Genevieve Carlton

Genevieve Carlton holds a Ph.D. in history from Northwestern University and earned tenure as a history professor at the University of Louisville. An award-winning historian and writer, Genevieve has published multiple scholarly articles and a book with the University of Chicago Press. She currently works as a freelance writer and consultant.

See more articles by Genevieve

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