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Avoiding Debt with College Student Credit Cards

Posted in blog,Uncategorized on September 12, 2017

College students are heading back to campus to start their new semester of school. While attending college, students should try to develop positive credit habits. After graduation, student loans will start requiring payment. Having positive credit habits can help get these loans paid off and kept in control.

Don’t apply for too many credit cards. Your credit score can be severely damaged if you apply for multiple cards. It can be tempting to get that free t-shirt or other give-a-ways by applying for a credit card. All credit card applications will show up as a hard inquiry on a credit report. If there are too many, it brings down your score.

Credit utilization is also factored in to your credit score. Using your entire credit line can hurt your score. According to USA today, people who have the highest credit score use about 10% of their available credit. Try using under 25% of your available credit to help you credit score as much as possible.

Students may also be added as an authorized user on their parent’s account. This can help them build credit, however, it could hurt their parent’s credit if the student has poor spending habits. Being an authorized user allows the primary card holder to freeze the usage of an authorized user if necessary.

There are also student credit cards that are designed with college students in mind. These are great for starting out and building your credit. Often, there are incentives available for paying bills on time.

Having a credit card while in college gives students an opportunity to build credit. It’s good idea to set spending limits whether your child is applying for their own card or if they’re being added as an authorized user on your account. By using a credit card, your child can learn skills needed to manage their money for their entire life.