The Best Credit Card Tips for College Students

Heading off to college soon? While you’re packing those boxes, you might wonder if you should open up your first credit card.

Today, we’re sharing a few things we think you should know about credit cards with the help of financial coach Lea Satterfield, founder and CEO of MPower Co

Keep reading to find out what to keep in mind when opening your first credit card!

college students sitting at computer; text that reads "credit card tips for college students

Credit Card Basics

A credit card gives you the ability to make purchases, balance transfers, and/or cash advances. Instead of withdrawing money directly from your checking account, you borrow money from the credit card company. 

Each month, you’ll receive a statement that shows how much you owe to the credit card company. You’re required to pay a minimum payment on the balance each month by a predetermined date. 

If you don’t pay the full amount that you borrowed, you’ll be charged interest on what you owe. If you fail to pay the minimum payment, you’ll be charged a late fee. 

Credit cards also have annual, or introductory fees, which vary from card to card. Late fees, transactional fees, and interest rates are determined by the credit card company.

Should You Open a Credit Card?

Financial Coach Lea Satterfield said this is a personal decision that depends on your financial status, maturity, and knowledge about the ins and outs of how credit cards work. 

That said, there are a few reasons why a college student might want a credit card.

1. To build credit:

Good credit is needed to qualify for things like home  and auto loans, and while these purchases might seem in the distant future, it’s important to build credit now so it’s there when you need it. 

“Having good credit is a key financial component, and the longer a person has good credit history, the more likely institutions will loan money to a person at better terms,” Lea said. 

Related: 3 Ways to Increase Your Credit Score

2. Fraud Protection

Fraud is, unfortunately, a reality–especially in the online landscape.  

But Lea noted many credit card companies will reverse charges if your card is stolen.

Remember: Persons Banking Company offers a digital education center where you can learn about the many ways we protect your financial information.

3. Rewards

Many credit cards offer rewards in the form of cash-back or rewards points, which can be used for things such as airline miles/travel, dining, and even gas.

“Being able to make something off of spending is something unique to credit cards, and they can add up over time,” Lea said.

How to Choose a Credit Card

Did you know the first line of credit you open will be the most important when it comes to your credit score?

“The longer you’ve had credit extended to you, as long as you use it responsibly, the better,” Lea said. “Having too much credit extended to you is a negative thing–if your ability to rack up debt is too high it will lower your credit worthiness.”

So, don’t fall for gimmicks. Instead, shop around and choose one card.

“Look for a good cash back card or a rewards points card for a company you plan to use for a long time,” she said. 

Lea said to ask these questions:

  1. “What are the qualifications for approval, the terms, and the card benefits?”
  2. “Will this card help me meet my long term goals?”

Remember: most cards will have high interest rates and charge late fees. “Your goal is to avoid these, because you are only going to put on the card what you can pay off each month,” Lea said. 

To learn more about credit cards at Persons Banking Company, click here.

Credit Card Mistakes to Avoid

If you decide to open a credit card before you head off to college, here are a few common mistakes Lea advises to avoid at all cost.

 1. Overspending

Don’t spend more than you can pay back each month, because you’ll owe more through high interest rates and late fees. Credit card companies will also flag your credit report if you fail to pay on time. 

“If a college student sees a credit card as the opportunity of a lifetime for a shopping spree or a once in a lifetime trip that they cannot afford otherwise, they’re likely not ready for a credit card,” Lea said. 

Lea advised new credit card holders to set up text and/or email reminders with your spending amounts.

“And check your checking account before and after spending to make sure you already have the money to pay it off.”

Bottom line? 

“Bad credit follows a person around for at least seven years, so, it’s essential to consider if you are responsible for ensuring you don’t charge too much and/or fail to make payments on time,” she said.  “The goal is to pay zero dollars in consumer interest, and racking up credit card debt quickly is an easy way to ensure you won’t meet that goal.

2. Opening More than One Card

“I’ve noticed that once a person gets comfortable with one card they then get comfortable taking on another one. Be very strategic and don’t open a store card at every place you ever shop,” Lea said. “The 10% off today likely doesn’t do enough to warrant the long-term effects.

3. Not Being Proactive

“You may be working hard to protect your information and do things right, but there are people who make money off of stealing your information,” Lea said. 

Lea also said credit card companies sometimes make mistakes in their reporting. “Start monitoring your credit report for accuracy. The only site I recommend is

Wrapping Up

Lea offers this final piece of advise:

“Having a credit card is a responsibility, and they are also a reality for most in today’s world … Talk with your support system about lessons they’ve learned, things they wish they would have done, their recommendations on cards. Learn from others,” she said. 

Lea Satterfield is the founder and CEO of MPower Co. She studied personal financial planning at the University of Missouri-Columbia and went on to pass the Certified Financial Planner ® examination. 

To learn more about Lea and MPower Co., visit MPower Co. You can also find Lea on Instagram, Facebook, and LinkedIn.

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