The moment a college student arrives on campus, he or she is bombarded with credit card offers. Advertisements for student credit cards are everywhere: in bags at the bookstore, in the campus newspaper, in your regular mailbox, in the residence halls.
With so many college students graduating with large amounts of credit card debt (figures vary, but most are at least in the thousands), learning how to manage a student credit card can be an important lesson for any student. While using a card wisely can be an important part of building credit and making it through a difficult time, knowing how to use a card wisely can be the hard part.
When to Use a Student Credit Card in College
Stick to the following rules when, and if, you need to use a credit card:
- You can repay the charge(s) within the card's next billing cycle. (For example, you need books this week but your loan check doesn't come in until next week.)
- You must meet your basic needs, like food / clothing / shelter, but set rules and be aware that you will need to repay those charges at the end of the month.
- You hit an unexpected problem that will keep you from staying in school, like a major car repair if you commute to campus. However, challenge yourself to think of alternatives: can you take the bus or carpool? Also keep in mind that many schools have funds set aside especially for students who are in "emergency" situations. Talk to your financial aid office as soon as possible if you think this applies to you.
When NOT to Use a Student Credit Card in College
Using a credit card while in school can be so easy -- and much more trouble that it's worth. Don't use a credit card if:
- The charge is not in your budget.
- You won't have the money to pay off the balance at the end of the month.
- The item / service you are buying is a want instead of a need. (Do you really need that new jacket? Or just want it?)
- You are buying an item / service you already have, like a gym membership, item of clothing, meals (if you have a meal plan on campus), or new cell phone when your old one still works fine.
What to Know About Student Credit Card Use in College
If you do want a credit card, just be smart about it. (They let you in to that school because of your brain, right?) Don't automatically get the first one you find. Shop around for a card that has the lowest interest rate possible, and consider places that may not be advertising on campus (like a local credit union). Additionally, be aware of any card's repayment options: When will payments be due? How much will they be? A credit card is not like a loan that comes with a grace period after you graduate and waits until you are done with school. That new sweater and nice dinner out will need to be paid back right away.