For college students, credit cards offer financial flexibility and a way to build credit. ... When you pay off your entire credit balance every month, you can avoid interest charges and use category spending (such as gas or groceries) to earn cash back and rewards points from credit cards with perks.
A credit card can be much more than just a convenient way to pay for today's college expenses. It can provide peace of mind in emergencies, be a fun way to accumulate rewards and cash back, and be a useful tool to help college students establish life-long good financial habits.
As college students work their way toward adulthood, it's reasonable to ask whether they should be given credit cards. On the one hand, it's generally a good idea to build up a credit score while they're still in college in order to make getting an apartment, opening a new credit card, or even finding a job easier.
Credit cards should be avoided unless the cardholder has steady income and can afford to pay the balance in full every month. College students lack the necessary income to remain balance-free, and tend to pay the minimum monthly payment.
Student credit cards are a good way for young adults to begin their foray into the world of money management. Cardholders can learn how to manage their finances and hone their financial skills.
The Downfalls of Teens Having Their Own Credit Cards
Some teens may be irresponsible and reckless with their spending. They can cause serious damage to their future credit score. They can forget to pay their monthly bills or max out their credit limits. Some teenagers are impulsive buyers.
Bad Credit Means Trouble Getting a Loan
A low score can make it harder to borrow, whether it's a car loan, mortgage, or credit card account. And if you do qualify, you'll likely have to pay higher interest rates to make up for your great level of default risk.
The best college student credit cards of May 2021
Best Credit Cards for 18 Year Olds:
| Credit Card | Best For | Annual Fee |
|---|---|---|
| Capital One Platinum Credit Card | Overall | $0 |
| Capital One QuicksilverOne Cash Rewards Credit Card | Rewards | $39 |
| Journey Student Rewards from Capital One | College Students | $0 |
| Discover it® Secured Credit Card | Secured | $0 |
Here's How to Build Credit at 18 Years Old:
The average debt for individual consumers dropped from $6,194 in 2019 to $5,315 in 2020. In fact, the average balance declined in every state. Following years of growth, both outstanding credit card debt and credit limits from issuers dropped in 2020 amid the coronavirus crisis.
One credit card should be enough for most college students, he says. How many cards should you have? “To prevent excessive credit card debt, it's better for consumers to have as few credit cards as possible. Having just one card is ideal for most students,” Davis says.
Since the money you spend comes out of your bank account, you may have to wait days or weeks to get a refund for a fraudulent transaction made with your card. ... Use a credit card for online purchases: It will offer more consumer protections than a debit card does in the event of fraud.
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