Skip to Content
African-American mother and young teenage daughter taking a selfie and family is planning for her college.
College Planning

College students making smart credit card choices

College comes with many expenses. While using a credit card may seem like an easy solution, it can come with risks and pitfalls. Learn to use credit responsibility.

Using credit cards responsibly

During your college years, money can get tight. And with offers from lenders who are willing to extend students credit by way of a credit card, it can be tempting. However, before you apply for a shiny new piece of plastic, it's important that you educate yourself on using credit cards responsibly.

Should students even bother with credit cards?

With all the negatives associated with credit cards, why should a student even bother with them? The fact is, while a credit card that isn't managed properly can hurt your financial situation, one that is managed well can be a good way to establish and build your credit history. Why? Because a variety of people and businesses such as financial institutions, auto lenders, rental agencies, landlords, and even potential employers, often make decisions based on your credit history. Generally speaking, the rate you pay for nearly any loan is typically based on your credit history and that includes the rate on credit cards. The better your credit history, the lower the interest rate that you'll pay.

Are some credit cards better than others?

In a word, yes. However, you'll need to do your homework. Before opening up a new credit card account you'll want to read the disclosures that come with most credit card offers. Yes, the print is small and can be complicated, but the fine print is where you'll find the particulars you should know about before applying for a credit card. Here are some things you'll want to keep a lookout for:

  • High annual fees just for having an open account - even if you don't use the card
  • Ridiculously high interest rates - typically 25 percent or above
  • Interest rates that start low and then suddenly rise when the introductory period is over
  • Steep late fees or instant rate hikes if you make a late payment
  • Two-cycle billing that can increase your finance charges if the bill is not paid in full at the first billing

Credit card companies understand the attractiveness of instant credit for students who are trying to budget for college. Just be sure that you take the time to select the right card for you and don't take on more debt than you can manage. In fact, a good rule of thumb is to only charge what you can comfortably pay off at the end of the billing cycle.

If you do have to carry a balance over a few months, then try not to borrow too much of your allotted credit limit. For example, if you have a $500.00 limit, stay at $250.00 or below. Borrowing a significant amount of your credit limit can actually have a negative effect on your credit score and can be considered high credit utilization. On the other hand, while high credit utilization may bring down your credit score, not using your credit card at all isn't recommended either. In the eyes of creditors, using your credit card wisely is a positive and demonstrates that you use credit responsibly. They can't gauge your credit worthiness if you don't use your card.

Learning how to budget wisely while in college isn't always easy. We hope these tips will provide you with a better understanding of building a solid credit history for a brighter, more financially secure future. Read more information on how college students can save while in college, as well as budget worksheets for students.



Arrows linking indicating relationship

Related Articles

College-age student in a scarf and glasses, slightly smiling and looking at her phone.

Saving for college: Making smart decisions about student loans

Learn more
A mom and daughter sitting in a field at sunset, chatting.

Life insurance could alleviate financial burden for your college student

Learn more
A soon-to-be college student sits and discusses college financial support options with her parents and a college admissions representative.

How schools determine what you are expected to pay

Learn more

All Learning Center articles are general summaries that can be used when considering your financial future at various life stages. The information presented is for educational purposes and is meant to supplement other information specific to your situation. It is not intended as investment advice and does not necessarily represent the opinion of Protective Life or its subsidiaries.

Learning Center articles may describe services and financial products not offered by Protective Life or its subsidiaries. Descriptions of financial products contained in Learning Center articles are not intended to represent those offered by Protective Life or its subsidiaries.

Neither Protective Life nor its representatives offer legal or tax advice. We encourage you to consult with your financial adviser and legal or tax adviser regarding your individual situations before making investment, social security, retirement planning, and tax-related decisions. For information about Protective Life and its products and services, visit

Companies and organizations linked from Learning Center articles have no affiliation with Protective Life or its subsidiaries.