7 smart credit card strategies for college students


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Gab Poska, a student at Stevens Institute of Technology in Hoboken, New Jersey, is one of thousands of young adults grappling with the financial fallout of the COVID-19 crisis. The biomedical engineering student is in the school’s five-year co-op program, which alternates semesters of classes with working full-time in their field of study.

“This summer should have been my second co-op semester,” she said. “I would’ve made around $8,000.” Poska was relying on those funds to cover the rent and expenses for her shared off-campus apartment, as well as her car lease and student loans.

Unfortunately, the coronavirus pandemic threw a wrench into those plans. After promising interviews with four different companies, Poska was told that hiring plans were canceled as the companies instead had to reduce the number of employees in their buildings.

Even her back-up plan, the part-time summer job she’s had since 2014 at a local children’s sports complex, fell through — under New York’s state mandate, that facility is still not allowed to reopen. Luckily, she socked away a good portion of income from her last co-op semester, and she thinks it’s enough to get her through the summer. At that point, she hopes a position she just secured for the fall and additional part-time work at the Stevens’ campus can help her catch up.

Even with all these hiccups, Poska was lucky, because she was financially prepared for a short-term financial setback. But many students are forced to look for alternative ways to bridge the gap, whether it’s borrowing from parents or relying on student credit cards until they can find work.

Getting a new credit card during the pandemic may be scary for students, especially for those with no experience managing debt. However, using a credit card while in school can help you deal with unexpected disruptions to your income stream while also helping build your credit history.

To keep your credit strong and healthy, even during economic struggles, follow these seven smart credit card strategies.


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1. Pick the best card

College students usually have a thin credit file, which limits the kinds of credit cards they can qualify for. That said, there are student credit cards that are specifically designed to help young adults gain access to credit. In fact, many of the major banks offer a student version of their major credit card product. When exploring student-specific options, look for cards that don’t charge an annual fee and offer tools and terms that are student-friendly. For example, some cards let you see your free credit score each month, while others offer rewards in the form of cash back or points in certain categories of spending.

Related: Should you pay tuition with a credit card?

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2. Be critical about your spending

Driving up credit balances early on can end up leaving you with a debt load in your post-graduate years. According to a 2018 Experian study, college graduates ages 22 to 26 had an average of $3,521 in credit card debt. To avoid that fate, use your card to help cover must-haves like your school supplies and the technology you need for distance learning, but put yourself on a spending budget otherwise. Don’t use your card to splurge on clothes or book spring break trips (which, thanks to the coronavirus pandemic, would likely be wasted money anyway) unless you have the funds saved up to pay it off right away.

Even though your credit limit will be on the lower side for your first card, you should also fight the urge to apply for multiple cards. Doing so can lead to overspending and is often unnecessary for students. In fact, among students with credit cards, 55% have only one card, according to Everfi’s “2019 Money Matters on Campus” report. Instead, shop around to find a credit card that you can grow with and that fits your lifestyle.

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3. Use your credit card as an opportunity to build your credit

Beyond having a credit card for emergencies or to cover expenses between paychecks, it’s wise to think of plastic as a tool for building up your credit file. In fact, in a Sallie Mae study, 59% of students said they obtained a credit card with the goal of building a credit history — the most popular reason given.

Starting with credit early is an A+ strategy, since one of the components of a credit score is the length of credit history. It might be the last thing on your mind now, but having a strong credit file will help you when you try to get that first car loan or be approved for an apartment of your own.

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4. Always pay on time – without fail

More important than just having a credit card is how you actually use it, which is why payment history is the top factor comprising 35% of your credit score. It’s also why your score will drop if you’re more than 30 days late on a payment. To ensure you never miss a due date, set up a text or email notification to remind you when your bill is due. You can also set up automatic payments to pay the minimum amount owed as a backup. Of course, the best way to prevent the balance from climbing is to pay the balance in full each month (or at least more than the minimum due).

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5. Watch that balance

Even if you never miss a payment, carrying a high debt load can be harmful to your credit score. That’s because utilization, or the amount of available credit that you are using, is the second most important component of your credit score, accounting for about 30% of it. The general advice is to try to stay below 30% utilization, meaning if you have a $1,000 credit limit, you should try to keep balances below $300 at all times.

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6. Be wary of cash advances

You might be tempted to cash those checks that your credit issuers mail out periodically or get a cash advance from an ATM if you’re short on funds, but try to avoid that. Cash advances (if your card even allows them) have a separate, higher APR as well as a fee. In other words, they can cost you way more than the actual withdrawal amount, so do what you can to avoid taking one out.

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7. Keep tabs on your credit

Take advantage of any tools your credit issuer offers, such as the ability to see your credit score for free, or any free credit monitoring tools. In addition, get in the habit of looking at your credit report. You’re entitled to see one per year from each of the three major credit bureaus (Experian, Equifax and TransUnion) by visiting Going through this exercise will let you see where you stand, help you gain an understanding of which behaviors are affecting your credit score and allow you to spot potential errors or cases of fraud.

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The bottom line

With the coronavirus pandemic leading to so much uncertainty in the world, having a credit card you understand and know how to use responsibly can help you manage when money is tight — while also helping you begin to establish your credit. However, if you abuse your credit limits or fall behind on payments, you can end up in a cycle of debt that’s hard to recover from. Shop for credit cards wisely, spend carefully and put your credit cards to work for you.

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