I Heard... I Should Get a Credit Card
It’s true that it’s never too early to start building your credit score. It’s also really nice for some parents to be able to pitch in for certain school necessities, or even monitor their student's purchases while they’re away at college. For this reason, college is often the first time that you will think about getting a credit card. So what should you (and your parents) be considering before signing up?
Do You Really Need One?
However tempting it is to have the freedom to throw down a card and pay for that pizza-shaped pool inflatable a month from now (what? everyone needs one?) it’s important to recognize: if you can’t trust yourself to buy “frivolous” things and have the funds to pay off the bill at the end of each month, sometimes it's best not to tempt fate. If you believe that you’ll have the funds from an on campus job for example, to pay off textbooks and the odd coffee on the way to class, then keep reading!
Do You Trust Yourself to Have One?
Getting a credit card is more than just having the funds to pay it off at the end of the month. It means that you know that you’ll spend within your limits every month, that you’ll have the patience to check when the due date is for your payment every month, and that you’ll monitor your purchases to ensure that no one is committing fraudulent activity on your card. This last point seems superfluous, but a Consumer Report study from April 2017 noted that not only is fraudulent activity for college students on the rise, but college students are also 3x more likely to not know any fraudulent activity has even occurred until they have been contacted by a debt collector (which means that your account has already been in default for an extended period of time).
Do You Understand the Pros and the Cons?
Among other things, here is a summary of the basic pros and cons that we’ve discussed here in our article. There are many, many more that we haven’t mentioned here, but those can be more personal to your specific situation.
Pros:
Financial freedom and flexibility between pay dates
Ability to improve credit score
Ability to have your parents help you pay for/monitor some of your expenses
Cons:
More responsibility to protect your financial profile
More temptation
If you’ve answered “yes” to all of the above, it might be something that you should learn more about. NerdWallet just released their picks for the best credit cards for college students—that could be a good place to start your research!