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How to Get the Most Out of Your Credit Card as a College Student

As a college student, you are no doubt under constant financial pressure. That's why using credit cards wisely can be such a valuable tool! Credit cards offer many benefits that can help you manage your finances and achieve your goals as a college student. In this article, we discuss some of the most important ways to get the most out of your credit card as a college student.

Jumpstart your credit history

Starting off with a credit card as a freshman in college can be a great way to jumpstart your credit history – and the more positive information you can put on your credit report, thus giving you a higher credit score, the better.

Below are reasons why building your credit history early with a student credit card is beneficial:

Applying for Future Loans

If you're under 21 years of age, it may be difficult or impossible for you to get approved for other types of loans like mortgages or car loans without having some sort of established credit history first. The earlier you start responsibly using a student credit card, the longer your credit history will be.

Renting an apartment

When you apply to rent an apartment, the landlord may check your credit score to assess how likely you are to pay your rent on time. Having a student credit card can help you build up your credit before applying to rent so potential landlords will have more faith in your ability to pay.

Find a job during or after college

Good credit is required by some employers when screening job applicants. Employers may check credit, especially for jobs that involve dealing with cash.

When applying for jobs with more responsibility or better pay, it's important to build up a solid credit history so that potential employers will be confident in hiring you. Using student credit cards can help start building up that positive information on your credit report.

Starting a business

Some creditors look at your personal credit score when you’re trying to establish business credit. A high credit score can help you save money on interest if you want to start a company.

If you dream of establishing a business or just want to keep the door open to this possibility, a good credit score is a major advantage.

So use your credit cards wisely and you may be able to build up a solid, positive credit history in no time!

Spend your money wisely and pay your credit card off

Spend only what you can afford

It can be tempting to use your credit card to buy everything you want, but it's important to only spend what you can afford and pay off each month.

If your credit card is maxed out or close to it, that will have a negative impact on your credit score since the amount of available 'credit' (or money you could borrow) would be reduced.

For example, if you have a credit limit on your credit card of $5,000 and have an outstanding balance of $4,500 on said card, that means you only have $500 in available credit. This small amount of available credit is reflected in your credit score and can lower it. It's best to keep your available credit as high as possible so that you can have a better chance of being approved for other types of loans in the future.

Pay off your balance every month

Make sure when you use your credit card regularly throughout college (and beyond) that all of your balance is paid off every month. This way, it can help you avoid paying interest and actually help rather than hurt you now and later down the line.

This will also help you build a positive credit history and can give your credit score a significant boost when combined with other factors like having few inquiries into your credit report.

If you can't pay off the entire balance for a month, pay more than the minimum amount due. When feasible, we recommend paying more than the minimum amount on your credit card bills. Only making minimum payments can actually make it harder to get out of debt later if all you ever do is cover what's due each month but never touch the balance itself.

Find a credit card with benefits that suit your needs as a college student

There are plenty of credit cards out there with crazy perks but hefty fees. It's smart to find a card that suits your needs as a student and can potentially benefit you after graduation.

Consider these advantages and disadvantages when finding the right student credit card for you.

Annual fee

An annual fee on a credit card is typical for cards that offer more in terms of rewards, but there are plenty of credit card options without an annual fee if you're looking to save on costs.

Make sure the benefits and rewards you get from using a new college student credit card outweigh any annual fee associated with it since this will help determine whether or not a particular credit card is worth keeping when all is said and done.

To simplify your life, look for a card with no annual fee so you can keep it open even after graduation to help establish a longer credit history with no extra cost. 

Introductory and recurring interest rates

It's smart to pay your credit card bill in full each month, since credit cards designed for newcomers have higher interest rates. By now, you know that paying your bill in full every month is how you don’t incur any interest. But some student credit cards offer a low-interest introductory period, which can be helpful if you have a big purchase you'll need a few months to pay off.

Cash Back Rewards

One of the great benefits of having a credit card is getting cash back for using it. Cash rewards from a credit card are a great way to get money back for making purchases you normally make in your everyday life.

The percentage of cash back on every purchase made from cash rewards programs will vary depending on the credit card.

With some credit cards, cash reward points you accrue expire after a certain amount of time if you don't redeem them. And most banks and credit unions require you to meet a certain minimum threshold of cash reward points before you can redeem. So student credit cards with cash rewards points that don't expire might be beneficial for you to reach those certain thresholds to make the most of your rewards.

A lot of credit cards out there will give you a certain percentage of cash back only for what you spend in certain purchase categories (i.e. gas, groceries, travel), while some may have a limit for the amount of cash back you can accrue in a month. If you're a college student looking for a student credit card where you don't have to think about those things, consider finding a credit card that has no category restrictions and has unlimited cash back.

Foreign transaction fees

Some student credit cards have foreign transaction fees that are charged every time you make a purchase in another country. This is important to know because it can add up if you’re traveling abroad, making your card less affordable.

Other credit cards have no foreign transaction fees which means that they are better suited if used when traveling outside the U.S.

So if you plan on studying abroad for a semester or going on an international trip over the summer, it could be beneficial to find a credit card that has no foreign transaction fees so you don't end up with a hefty surprise bill when you get back to the US!

Keep your student credit card open after graduation if possible

Like we mentioned earlier, a student credit card is a great way to start to build your credit history early and pump up your credit score. There are some credit cards for college students that allow you to keep using the card after you graduate, which is a fantastic bonus.

The advantage of keeping your college student credit card open after graduation is that it maintains your credit score. If you close your student credit card after graduation you not only lose the amount of credit available to use but if your student credit card was your first source of credit, your credit lifespan will be shortened and thus ding your credit score.

After graduation, find a way to keep your card open and see if your bank or credit union will upgrade it for more benefits or a higher credit limit. This will keep your credit history lifespan as long as possible and keep your credit score healthy.

If you don't plan to use your student credit card but still want to keep it open, tie a monthly recurring payment (like Netflix or Spotify) to it and set an automatic payment to pay the card off every month. This will keep your student credit card active and avoid it being closed by your bank or credit union.


Student credit cards can be a great way to build your credit history if you use them wisely. Spend the money on necessities and pay off your balance every month so when graduation rolls around, you can keep using your credit card for years without the worry of interest payments or fees.

Check out our Student Budget Calculator to see how you can manage your expenses while being a student.

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The information and topics featured are for informational purposes only and does not constitute legal, tax or financial advice. All financial situations and circumstances are different and may not apply to the specific information provided. Seek the advice of a financial professional, tax consultant, or legal counsel to obtain guidance specific to your needs.