Although some people get a credit card at a younger age, when you finally get one, it can feel like a real step in growing up and being more of a young adult. I got my first credit card just after my first year of college. But how do you know if it is the right time to get one? & which type of card should you get?
When is the right time to get a credit card?
This is something that is different for everyone, depending on your situation. If you have a good relationship with your parents, I would recommend starting there. They tend to have good insight about those types of things. My parents recommended that I get one since I was starting to take on more financial responsibility & could benefit from the points, cash back, and other offers now.
Another thing to consider is if you are financially responsible enough to handle a credit card. This tends to be one of the hardest things for young people to understand. There is a large responsibility when it comes to having a credit card & it is twofold.
The first part is that you have to know that you will continue to have monthly income. I do NOT recommend getting a credit card if you do not have a consistent job. The reason I recommend having a job is because you will be able to predict how much you will make that month & therefore how much money you will be able to spend on your new card.
The second part of having a credit card is being sure to not overspend & to pay on time. If there is only one thing that you get from this entire post, PLEASE PAY YOUR CREDIT CARD BILL ON TIME. Not paying on time is just a waste of your money! My personal way of looking at a credit card is as a debit card that gives you rewards. You should never spend money that you don’t have. If you do this correctly, your credit will improve and you will make extra money just from using your credit card!
What type of credit card is the best for college students?
Everyone’s needs and preferences are different when it comes to credit cards, but I can tell you some key things to look at when it comes to choosing your card. Personally I chose the Discover It Student Cash Back Card which I will explain more about a little later….
So the first thing to think about in my opinion is where you are going to be spending the most money on your card. Flights & travel? Gas & groceries? Ride shares & shopping? Wherever it may be, keep that in mind when you are choosing a card. Different cards give different percentages back dependent on what you purchase. For example, my Discover It Student Cash Back Card gives 5% cash back on purchases made at grocery stores, restaurants, gas stations, rideshares, and online shopping, & it gives 1% back on everything else. There are other cards, such as airline cards, though, that give extra miles or flight points for using their cards. So just think about what will get you the most points and rewards!
The second thing that I looked at was the annual fee. As a college student especially, my recommendation would be to find a card that has no annual fee. Cards with annual fees may have higher benefits or more features, but I believe that keeping it simple and saving money is a better option for your first credit card. My card has no annual fee that I have to calculate into my savings. It just decreases the amount of things that you have to keep in mind as a busy college student as well.
Finally, I encourage you to take a look at the extra rewards that come with signing up for the card! There are many cards that offer promotions when you sign up such as $100 back if you spend $500 in the first three months, 10,000 extra miles, etc. My Discover It Student Cash Back card does not come with an instant reward like others, but at the end of the first year, they will match the cash back that I earn! Along with that, because it is a student card, receiving over a 3.0 GPA can earn me an extra $20 every school year on my cash back!