Pros and cons of student credit cards

Geoff Williams
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Geoff Williams
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You’re in college and have new financial freedoms – and responsibilities. Should you get a student credit card?

As with anything, when it comes to student credit cards, there are ups and downs, ins and outs and pros and cons to consider. So if you’re thinking about getting a student credit card, we’ll lay out the reasons you should apply for one in college – and the reasons you may want to wait.

You’ll build credit early

There are good arguments why college students should have credit cards – and this is one of the best.

The argument goes that you’ll start building credit before you buy a house or a car or before you take out any personal loans, other than student loans, of course. Show lenders that you know how to borrow responsibly in college, and when the day comes to take out other loans, you’ll likely have access to better rates and terms.

Counterpoint argument: You’re in college. You’re probably on a four-year plan, not a 20-year plan. Is it really going to be that big of a setback if you wait until you get out of college to get a credit card? Maybe not.

It may be easier to get a student credit card now, rather than a regular credit card later

No guarantees, of course, but when a credit card company issues you a student credit card, they know that you’re a college student. They recognize that you aren’t going to have a lengthy credit history of borrowing responsibly. They still won’t give anyone a credit card, and if you are between 18 and 21, it can sometimes be especially challenging to get approval without a parent or guardian co-signer. Still, the bar is lower to get a student credit card when you’re a college student than if you’re a young college graduate with no credit card history and looking to get a regular credit card designed for everyone.

Also, look at it this way, you get a CardName now – just to pick a card at random – and you have a relationship with Chase. After you graduate, presumably it should be pretty easy to go out into the real world and get a Chase credit card meant for non-students.

Counterpoint argument: Then again, if you get a good job after college, one with a solid salary, a credit card issuer may approve you without any problems whatsoever. It’s really hard to predict these things.

You can save money because many student credit cards offer rewards, like cash back

For instance, the CardName card offers 5% cash back on everyday purchases at different places each quarter like grocery stores, restaurants and gas stations, up to the quarterly maximum when you activate. Others, like the CardName, earn bonus cash back on all purchases so you’ll save no matter what the expense.

This shouldn’t be an excuse to buy things you don’t need with your credit card, but if there are purchases you have to make, you might as well get rewarded for them.

Counterpoint argument: You will only save money if you pay the balance off in full every month (the one exception is if your card has a 0% APR period where you can buy stuff and carry a balance without being socked with interest charges right away). If you carry a balance, you typically will not save money, no matter how much cash back your credit card gives you.

It may be better to learn how to use a credit card in college, rather than in the “real world”

You may want to push this argument with your parents or guardians if you want them to be co-signers. Wouldn’t it be better to learn all about credit cards now, while your parents are still helping you and able to monitor the account – than when you’re alone and able to get a regular credit card without a co-signer?

Credit cards designed for students offer a number of benefits to help students learn good financial habits. Lower credit limits for one, and rewards for good behavior, like credit limit increases after an extended period of on-time payments, or even cash incentives. The Chase Freedom® Student, for example, offers a $20 Good Standing reward each account anniversary. “Good standing” means that your account is open and not in default. This perk is available for the first five years after opening the account.

There are usually other perks, too, like being able access your credit score for free at any time and fraud protection which includes real-time fraud monitoring.

Counterpoint argument: You can get in trouble with a student credit card the same way you can with a regular credit card. If you’re late with a payment, you won’t be able to call the company and explain that you’re a junior in college, and this is your first credit card, and, hey, they’ll understand if you make that minimum payment in a couple months, right?

No, the credit card company will not understand. Well, they may understand, but there will be consequences.

Still, it is a good argument that college can be a fine time to learn how to use a credit card. It’s probably best to learn how to use a credit card when you’re in college and especially if your parents can help you out if you do find yourself struggling to make your payments – or if you find yourself giving into impulse shopping or making extravagant purchases because you’re thinking, “Hey, I can buy this. I have a credit card.”

Your parents may be able to do a lot to help keep you on a righteous financial path.

Why should college students have credit cards? Or why shouldn’t they? The bottom line.

You really can make an excellent case either way, to get a student credit card or to wait. It really comes down to the college student. Are you making enough money to pay off a credit card every month? Do you have a pretty good understanding how credit cards work? And good reasons for getting them?

The fact is, if you have a student credit card, and you use it responsibly, you can build credit, learn the ropes of using a credit card and save money throughout college.

But the fact also is – it also may not be imperative that you get one. Maybe you don’t have a job because you’re focused on studies. Maybe you feel you’re not that responsible with money yet, and so now is not a good time.

In other words, when it comes to getting a student credit card, or making any financial decision, you have to do what’s right for you. If you can get through college remembering that, that may be one of the best lessons you’ll pick up.

Geoff Williams
CardRatings Contributor

Geoff is a freelance journalist and has been since the 1990s. He specializes in personal finance and small business issues and has seen his work published with numerous news outlets including The Wall Street Journal,, Reuters, The Washington Post and Consumer Reports. He also...Read more

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