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Should College Students Have Credit Cards?

By Kayla Korzekwinski

Kayla Korzekwinski is a Scholarships360 content writer. She earned her BA from the University of North Carolina at Chapel Hill, where she studied Advertising/PR, Rhetorical Communication, and Anthropology. Kayla has worked on communications for non-profits and student organizations. She loves to write and come up with new ways to express ideas.

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Edited by Maria Geiger

Maria Geiger is Director of Content at Scholarships360. She is a former online educational technology instructor and adjunct writing instructor. In addition to education reform, Maria’s interests include viewpoint diversity, blended/flipped learning, digital communication, and integrating media/web tools into the curriculum to better facilitate student engagement. Maria earned both a B.A. and an M.A. in English Literature from Monmouth University, an M. Ed. in Education from Monmouth University, and a Virtual Online Teaching Certificate (VOLT) from the University of Pennsylvania.

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Updated: February 27th, 2024
Should College Students Have Credit Cards?

As a college student, you may wonder whether you should have a credit card. Credit cards are convenient, build credit, and can teach students how to manage money. However, there are pitfalls to avoid as a college student with a credit card. Continue reading to learn if college students should have credit cards!

Related: Best credit cards for students

Pros of having a credit card as a college student

Having a credit card can improve your college experience and set you up for financial success after graduation. Here are some of the positives of having a credit card:


The first pro of having a credit card in college is convenience. Students may not always have the funds to make day-to-day purchases. A credit card can allow students to make purchases between paychecks. They’re useful for essentials like groceries, gas, and school supplies.

Credit cards are also useful to have in emergencies. If you find yourself in a situation where you have to make a big payment unexpectedly, such as a visit to the doctor or car troubles, a credit card can cover the costs at the time.

Build credit

Making consistent, on-time payments on your credit card can help build students’ credit score and credit history while in college. This gives students a financial boost post-graduation. Having a good credit score can get you better rates on car and home loans. A good credit score is also often required to rent a house or apartment.

Paying on time will establish a good payment history, which is 35% of the FICO credit score. Just having credit over a period of time will also establish your credit history, which makes up 15% of the FICO credit score.

Related: How to dispute a credit report

Money management

Most college students aren’t able to swipe their credit card for every purchase. Having a credit card will help you learn how to budget and manage your money. Since payments must be made every month, students should make a monthly budget for what they plan to use their credit card on.

Credit cards for students often initially start with low credit limits. This allows students to use the card and make payments on a small scale while learning how to manage their money.


Most credit cards offer rewards to users. These rewards can be in the form of cash back, travel points, and more. Another common benefit of credit cards is 0% APR for the first year. This benefit can help students save a bit more while building their money management skills.

Cons of having a credit card as a college student

There are fewer cons than pros of having a credit card in college. However, the effects of mishandling your credit card can have consequences that last for almost a decade! Be sure to consider these cons before signing up:


One of the biggest problems college students and graduates face is debt. Making payments on a student’s salary can be challenging. Especially if you have student loans, you don’t want to end up in more debt than you need. Students can end up in credit card debt if they don’t make their monthly payments in full and on time.

A best practice for credit card payments is to pay the entire balance every month. Doing this will ensure that you don’t enter the next month with an existing balance. You may think that making the minimum payment is enough, but any balance that isn’t paid will carry over. On top of that, you’ll have to pay interest on the unpaid amount. Getting too comfortable with letting your balance carry over can establish bad financial habits and put you in debt.

Negative effects on credit score

Just as credit cards can improve your credit score, they can hurt it. Payment history makes up 35% of the FICO credit score, so just one missed credit could hurt your credit score significantly, especially if you don’t have much other credit to offset it. Missed payments stay on your credit report for up to 7 years

Another factor in credit scores is credit utilization ratio. It makes up 30% of your credit score. The credit utilization ratio is the difference between your owed balance and available credit. If students use a large amount of their credit without paying it off, their credit score will be negatively impacted.

Having a low credit score and documentation of missed payments can hurt students’ chances of getting new credit or loans in the future.

Tips for responsible credit card use

Set a budget

It is important to create and follow a budget to ensure you are not just swiping your credit card willy nilly! By having a budget, you can use your credit card when necessary to avoid falling into debt. Additionally, budgeting allows for flexibility in spending in case any emergency situations arise. 

Pay in full 

When paying your credit card bill, you can pay in small increments, the minimum amount or in full. It is in your best interest to pay in full each month in order to avoid any remaining balance to accrue interest or cause a snowball effect of falling into more and more debt each month. Paying in full may seem like a daunting task as a student, so in order to achieve this goal you should stick to your budget! 

There are jobs and opportunities students can take advantage of in order to gain passive income to use towards paying credit card bills. This could include making money through a side hustle or working remotely while being a full-time student. However, if working is not something you are not able to manage while attending school, just ensure that you are not swiping your card more than you can pay in a month! This will keep you on a good path of being able to pay your bill in full each month. 

Use your credit wisely

One of the benefits of a credit card is that it is a widely accepted form of payment, however, this can be challenging as it can be easy to swipe your credit card at various stores and have it feel like it is not real money. Therefore, use your credit card wisely! Think about what purchases would make the most sense to use your credit card. For example, if you receive 5% cashback on gas purchases with your credit card you should be using your credit card for gas! However, if you have cash set aside that may be a good use for smaller purchases like coffee. Ultimately, just be wise with your spending decisions and when it makes the most sense for your situation to use your credit card. 

Build an emergency fund 

One of the most important things you can do while having a credit card is creating an emergency fund! By setting a little money aside each month, you can save up for something rewarding or if some type of emergency occurs such as car trouble or tuition issues. Having some back-up funds can help ensure you do not fall into credit card debt or accruing unnecessary interest. 

Alternatives to credit cards for college students

If a credit card isn’t the right choice, there are some alternatives that college students can use.

Become an authorized user

If you want to use a credit card, but avoid potential negative effects, ask to be added as an authorized user to a parent/guardian’s card. An authorized user can be added on a credit card and use it as if it was their own. Most credit card issuers report the authorized user’s credit score as well as the primary user. This can boost your credit score a bit if you spend wisely. The primary cardholder remains responsible for payments.

Secured credit cards

Secured credit cards use a deposit by the borrower as the credit limit. This can allow students to determine how much they will spend on their credit card ahead of time. Secured credit cards impact your credit score in the same way as regular ones. Making payments on time can establish your credit score while in school.

Prepaid cards

Prepaid cards can be loaded with funds to set the amount students spend. They do not contribute to your credit score.

Debit cards

Debit cards take money from a checking account. They do not involve credit, so they won’t affect your credit score. However, they are more convenient than carrying cash and can help students develop good spending habits with their own money.

College students and credit cards

Given all this information, make the choice that is best for you! Having a credit card in college is convenient and can establish credit, but can have negative consequences if not handled wisely. If you do decide to get a credit card, you should ensure to stick to a budget so you don’t spend more than you have. Additionally, it’s a good idea to enable AutoPay or set reminders for yourself to ensure that you pay your bill each month.

Below is a chart highlighting the pros and cons of having a credit card in college. 

Pros  Cons
Build credit Debt can accumulate quickly
Widely accepted form of payment that can be used for emergencies High interest rates can make borrowing expensive
Teaches financial responsibility You could harm your credit score
Rewards and perks Could lead to impulsive spending 

Additional personal finance resources

You’ve got questions about starting off on the right foot in your financial life, and we’ve got answers. Check out our articles on the difference between credit cards and debit cards and whether you should pay your tuition with a credit card to start. We can also help explain how student loans affect your credit score, and advise you on how to save money and stick to a budget in college. Good luck out there, and remember to check back with us for any resources you might need!

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Frequently asked questions about whether college students should have credit cards

What features should college students look for in a credit card?

Features to consider in a credit card include interest rates, annual fees, credit limits and any rewards or benefits offered. It’s important to choose a credit card that aligns with your financial habits and needs.

Are there alternatives to credit cards for college students?

Yes there are a few alternatives that college students can use! Alternatives can include debit cards, prepaid cards, secured credit cards and becoming an authorized user under a parents credit card. Each alternative has its own pros and cons so you should choose based on your preferences and needs.

What if I find myself in credit card debt as a college student?

Seek help immediately!! Credit card debt is a serious issue and it can be harder to relieve the more you spend. Therefore, contact the credit card company as soon as possible to discuss your situation and create a repayment plan. You can even reach out to a financial advisor for guidance.

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