Should college students have credit cards?

Tuition. Rent. Food. Books. Gas. There’s a lot to handle in college as you build your future. No wonder you’re thinking about getting your first credit card. But just because responsible use of a card can help you budget and build credit doesn’t necessarily mean it’s right for you.

There’s no right or wrong answer to whether college students should have credit cards. It’s a highly individual choice and depends on your specific situation. Before you make that decision, here are some points to think through.

Key takeaways

  • With responsible use, credit cards can help college students build credit history, be prepared in an emergency and learn how to manage their finances.
  • To use credit responsibly, it helps for students to understand things like card terms and conditions, interest rates and potential fees.
  • Credit card options for students include a student credit card, a secured credit card or becoming an authorized user on someone else’s credit card. 

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Why should college students have credit cards?

You’re probably already picturing how having a credit card could help you in college. A card can help if you’re shopping online, buying groceries, paying bills, studying abroad or studying in the U.S. as an international student. Here are some other ways a credit card could be helpful, if you use it responsibly.

Build credit history

How you use and repay debt affects your credit history and credit scores, according to the Consumer Financial Protection Bureau (CFPB). And companies can use the information in your credit reports to decide whether to offer you a car loan, an apartment, a mortgage and sometimes even a job. Building a credit history in school means you won’t be starting from scratch when you graduate.

Prepare for emergency situations

What if your car breaks down or you need to upgrade your laptop or cell phone? If you don’t have an emergency fund, a credit card could help you deal with an unexpected cost. Just make sure that you don’t overuse this resource and have a plan in place for how you’ll pay it off. The CFPB notes you should be clear with yourself about what represents an emergency.

Learn to manage your finances

Having a credit card can help you build financial literacy through doing things like budgeting and making on-time payments. The CFPB says that young people learn financial skills more and benefit when they have opportunities to make their own financial decisions.

Earn cash-back rewards for essentials

Cash-back credit cards can help you get the most out of your spending. And when you’re a student, every little bit helps. It may be worth checking out other kinds of rewards credit cards too, if you’re interested in different perks.

Help protect yourself from fraud

If your cash is stolen, there might not be much you can do about it. But if you lose money through credit card fraud, you might not be held responsible. And if you’re a Capital One customer, your credit card has a number of security features that may help you detect fraud.

What are the disadvantages of credit cards for college students?

There are lots of good reasons to have a credit card in college. But everyone’s situation is different, and understanding how credit cards work and using them responsibly is important.

Consider your situation

Do you have a regular source of income? If you’re unable to make your credit card payments, it could result in derogatory marks on your credit reports. This will lower your credit scores.

Paying your statement on time every month is only one key to building credit. If you’re able to pay more than the minimum each month, it can help you limit or avoid interest charges on new purchases.

Understand the basics

Do you understand the basics, like how the interest rate works, credit card terms and conditions and common credit card fees? Different transactions might have different rates or fees. For example, a cash advance might not be treated the same as a standard purchase.

Know the consequences

You could be tempted to overspend. Making late payments can result in late fees. You’ll be legally responsible for repaying your debt. And negative information could damage your credit scores, which could hurt your long-term goals, like owning a home or buying a car.

Credit card options for college students

If you’ve weighed the pros and cons and decided to go for it, you can start thinking about the best credit card for you. If you use them responsibly, the following options could be a good entry point into the world of credit: 

Student credit card. Having a student credit card isn’t that different from having a regular credit card. Student cards can be more accessible to those with no credit history. They may have features like credit-tracking tools that can help you build a healthy relationship with credit, and they might offer more fraud protection than a debit card. Capital One credit cards for students let you earn rewards while you build credit with responsible use. But make sure you understand how student credit cards work. They may come with a lower credit limit and a higher interest rate than some credit cards for people with a more established credit history.

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  • Secured credit card. With a secured credit card, you deposit an amount of money that the issuer holds as collateral, sometimes known as a security deposit. For example, the Capital One Platinum Secured card has refundable security deposits of $49, $99 or $200, depending on your creditworthiness, for an initial credit line of $200. Deposit more, and you could raise your credit line as high as $1,000. You can then use the card to make purchases just like you would with other credit cards. 
  • Authorized user on someone else’s credit card. Becoming an authorized user means you get a card linked to an existing account that you’re authorized to use. The account could belong to a friend or family member who is willing to add you to their credit card account. You’ll get your own card linked to the account’s line of credit. The primary cardholder is ultimately the one who is responsible for the account. But the CFPB says negative actions, such as late payments, could affect both of your credit scores if they’re reported to credit bureaus.

Should you get a credit card in college, in a nutshell

Getting a credit card in college is an exciting milestone. And if it’s used responsibly, it can be a great way to jumpstart your financial future. Before you get a credit card as a college student, you should consider your financial situation and whether you will be able to use it responsibly. 

If you’ve decided you’re ready for it, you could see whether you’re pre-approved for some Capital One credit card offers, like the Capital One Platinum Secured card or a Capital One Student credit card. The pre-approval process is quick, only requires some basic info and won’t hurt your credit scores.

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