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College and Credit Cards

Article One of Kylee's College Corner

College and Credit Cards

Credit cards can be scary for anyone but even more so for a college student. We already worry about student loans and making ends meet; a credit card can turn into yet another dark cloud hanging over our heads. When you’re already living paycheck to paycheck, it’s so easy to start seeing a $750 limit as $750 you’re able to spend. DON’T FALL INTO THAT MINDSET. But also let me be the first to tell you… Credit cards ARE good if they are used responsibly, even for college students. Here are some things to consider when getting a credit card.

Do you really need a credit card?

Think about this long and hard. Don’t get a credit card for kicks and giggles or because it’s seems like the cool, adult thing to do. If you’re looking to improve or even establish your credit, there are many other ways to build your credit that are less risky. Taking out a small bank loan that your parents co-sign on or opening a store credit card are both simple ways to build credit without a card.

Pro Tip: If you’re trying to build your credit score, only use 30% of your credit limit. If your limit is $750, you should only be using an average of $225 per statement cycle. Maxing out your card may sound cool but it’s actually one of the worst things you can do.

Many college students (and adults!) have a credit card strictly for emergency use only. Life is crazy. Flat tires happen, tow trucks need paid, hotel rooms need booked and you don’t have that kind of money on hand. Having an emergency card gives you the opportunity to deal with the situation at hand then pay off the card at a later date.

I Hate Being an Adult

 

What are you looking for in a credit card?

There are so many great features a credit card can offer you. Monthly updates on your FICO credit score, cash advances, and you can earn cashback on your purchases.  As great as that sounds, when the fees or interest you’re paying to the credit company are greater than the money they’re paying to you… it’s time to reconsider your choices. But if you’re a smart spender, you’ll be getting paid to have the card! Credit card companies call these people “deadbeats.” This is the one time in your life you’ll be applauded for being a deadbeat. Credit card companies make their money off the fees and interest their customers pay. Deadbeats are people who pay off their card each cycle so interest isn’t accrued but cashback is still earned. If you aren’t doing anything to accrue interest, congrats! You’re a deadbeat.

Congrats! You're a Deadbeat!

Student credit cards are one of the greatest ideas in my book. You don’t have to have any credit to be accepted, they’re crazy easy to apply to, they have super low limits to keep you from overspending, and many of them give cashback to you for good grades. Score! Plus, if you really enjoy being a customer of that company, nearly every single company will transfer you over to a non-student card once your four or five years of college are up.

Research Cards and Companies

There are tons of credit cards specifically tailored to college students. Nerd Wallet was my main resource when choosing my own credit card. (https://www.nerdwallet.com) The site allows you to pick what you’re looking for in a card such as cash back bonuses, low interest rates, or special deals you can get for having a high credit score. Then, from the cards that fit your specifications, you can compare. Another thing to consider when looking for a card is the company itself. Be sure to look into stores and countries, if you’re the adventurous type, where the card is accepted or where it will be declined. Get out and talk to those with credit cards about their experiences with their company’s customer service and general approval ratings. There’s nothing more reliable than actual customers. If something about the company makes you hesitant, cut them out. This is your money we’re talking about here.

 

Counting Money

 

My Story

I promise I’m not some random person spouting off some information to you. I applied for my credit card the month before I began my freshman year of college. I researched and compared and researched some more before deciding which one to get. I wanted a card that would offer me a low interest rate and cashback in the categories I use most often. I chose to get a credit card in order to build up my credit score and as a safety valve in case of emergencies. As I grew more comfortable with the card, it evolved into my main payment method for every purchase I make. Another aspect I really wanted was a great customer service team. They’re the real MVPs behind the card and what makes it great or not so great.

I’ve also recently gotten myself in a bit of a pickle. I spent more than I could pay off and am no longer a gold star deadbeat. I had to pay interest! This is literally me throwing money at my card to get it back down to a reasonable amount.  

 

Throwing Money Away

 

I’ve probably overused the word “responsible” in this article, but it really is important. You can bring your credit score back up again if debt destroys it but it takes years of diligence that could have easily been avoided if you wait until you have some serious self-control. Another Pro Tip! Avoid the credit card companies that set up shop during the first couple weeks of school. Don’t let them talk you into a card that you don’t need or that has crazy high interest rates. Take your time and consider your options carefully. Remember: Money is just a means to an end. Let money represent the things you can do rather than the things you cannot.

Til' next time,
Kylee

Did you know NebraskaLand National Bank offers consumer credit cards?  They might be just what you're looking for!

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