The student's guide to using a credit card

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If you’re headed back to campus—or heading there for the first time, you may see a familiar scene in the SUB: financial institutions of various stripes set up offering shiny, new credit cards. And while the swag can be tempting—who doesn’t want a free t-shirt or a novelty flying disc!—it’s always a good idea to proceed with caution and treat this like the serious decision it is.

It’s not that you shouldn’t sign-up for a credit card at all. In fact, a credit card can be a valuable tool when used correctly. It’s just that what might seem like a bit of an impulse decision, can have some serious financial implications down the road if you’re not careful.

But used wisely, a credit card can be your financial BFF when it comes to certain things. Curious? Here’s how!

Build your credit history

When you’re first starting out, your credit history is pretty thin because you simply have not had the time to build it. Credit cards are an excellent way to start to build your credit history, which will become important as you ~grow up~.

Many student credit cards have no fees and low limits—which means you can get into the credit card game without getting into too much trouble. Have a debit card? Instead of using it to make regular purchases like groceries or fun, break out your credit card. Just make sure you’re paying off the balance in full. This is the important part.

Using a credit card doesn’t mean spending money you don’t have. It’s about paying for things in a different way to start creating a digital paper trail. By making small purchases and paying them off promptly, you won’t have to pay interest and you will begin to build a digital record of how financially responsible you are. That way, when it comes time to get a bigger loan—like say a car loan or a mortgage—you can demonstrate that you can be trusted to pay back what you owe.

Use in case of emergency

Another reason to have a credit card when you’re a student is in case of an emergency. Stuff happens all the time. Maybe you need a textbook but your student loan hasn’t come in yet. Or maybe you need to book a plane ticket home to see your family. Or you need to get home in a taxi but forgot to get cash from the ATM. Regardless of the scenario, having a backup financial resource when you need it can provide immense peace of mind.

Just like before, however, make sure you can pay off your purchases. Again, this isn’t about spending money you won’t/don’t have. It’s about a stop-gap measure to carry you over until you do have the cash in hand.

Want to learn more about credit cards? Download our free First Timers' Guide to credit cards!