You might have had a negative experience with credit cards in college or maybe you are curious how you can make credit cards work for you. Either way, I will start with a quick disclaimer. Credit cards aren’t for everyone. If you struggle with credit cards, stick to cash only for a while. If you think credit cards are real money, please don’t get one. This is only applicable for people who understand what credit cards are and what they are not.
There are two main reasons why I think you should have a credit card in college:
- Learn How to Be Responsible with Credit Cards
- Build Your Credit Score
Learn to Be Responsible with Credit Cards
I got a credit card at 18 years old (freshman year of college). My dad told me to put small expenses on it each month (gas or food) and pay it off right away. Every month I used my credit card for gas or food and then paid it off right away. I never had a balance, never paid interest, and never missed a payment. I learned that credit cards are helpful tools but they are not money. I did not view my credit limit as available cash to buy a new TV or designer clothes.
I understand that some kids cannot be trusted with credit cards but if you understand that credit cards are not cash and you must pay them off in full each month and on time, you can develop responsible credit card habits early.
I now use credit cards for everything. I rarely have cash. For me, it works. I started developing healthy credit card habits at 18 and never had credit card debt. Some quick tips for developing healthy credit card habits are:
- Remember credit cards are not free money. Your credit limit is NOT money you have.
- They are a tool you can use to gain travel rewards, cash back gift cards, etc.
- Start by putting 1 expense on your card a month and only use it for that. I started with gas and only used my cc for gas. Once I could trust myself with that, I added food. You can build good habits and expand from there.
- If you ever start carrying a balance, pay it off and close the card. You don’t want to go into debt.
- Pick a card with no annual fee. For your first card, you don’t need to pay for fees. There are wonderful cards available for no annual fee. I had one designed for college students and I accumulated rewards points I used for gift cards.
Build Your Credit Score
I 100% believe you should start thinking about your credit score as early as possible. Read my post, Why You Should Care About Your Credit Score, for more information on why I think credit scores are important. Should you obsess over it when you are 18? No, but it is something you should think about.
Since I opened a credit card at 18 years old, I started building credit earlier than most people. When I went to buy a car after I graduated college, my credit score wasn’t 0. I still have the same card open now (8 years later) and it is my oldest line of credit which helps increase my credit score. If I did not open a credit card until after I graduated college, I would only have 4 years of credit history.
I think it is important to understand what a credit score is and why it is important. This might help motivate you to stay out of credit card debt. My apartment complex checked my credit score when I applied so I thankful I had an excellent credit score. I am also planning on buying a house in the near future so I am glad I do not have to worry about starting to build up my credit score. I don’t agree with the statement you can only have a high credit score if you are in debt. I have never had credit card debt and my credit score is extremely high.
I am here to share my opinion, tips, and financial journey. Make sure to do your own research. There are many helpful financial gurus. Take pieces of advice from each and form your own financial plan. Everyone’s journey is different and if you cannot trust yourself (or your child) with credit cards, don’t open one. I think that there are ways to use credit cards responsibly. By opening a credit card in college, I learned healthy credit card habits and started building my credit at a young age.
If you have any questions about credit cards or credit scores, send me an email!
Need help creating a budget or just want to refresh yours? Make sure to check out my review of Your Sunny Money Method.