College students and credit cards

Here's how to build a good credit history with credit cards as a college student

Having a credit card or being an authorized user on a parent's account is a rite of passage into the world of financial responsibility for someone in college. Being an authorized user allows you to use your parent's credit card and begin establishing good habits. But with that freedom comes responsibility.

If you don't use credit cards wisely or form good credit habits early, there are implications to your credit history. A credit history is used for gaining access to more credit—like a student loan, car loan or mortgage. It is also important for things such as getting an apartment lease, obtaining better rates on car insurance, and even background checks by future employers. Not using credit wisely has its drawbacks, but responsibly using a credit card to build a credit history is very important to help you get access to things you may want in the future.

How college students can use credit cards wisely

Start slow

There are different ways to start using a credit card. One way is to be added as an authorized user to another account. That way, when you establish rules together, you can monitor your spending and learn the responsibilities of knowing what you spend, how you can pay for it, and the benefit of paying your bills on time.

Apply for a credit card with a cosigner

This is a great way to start building your independent credit history. When a college student borrower has insufficient or no credit history, a creditworthy individual may be necessary to apply for a credit card. Applying for a credit card with a cosigner allows you to have a credit card in your own name; however, the cosigner (typically a parent or legal guardian) will be responsible for making payments on the card if you cannot pay your bills. In this situation, the cosigner's credit history could be affected. Having someone cosign for a credit card offers the opportunity for you to build up your own credit history and learn to maintain it responsibly so that you can become a creditworthy borrower in the future.

Apply for your own credit card and take on independent responsibility

When you have the independent ability to pay as a college student, you can open a credit card in your own name and you have the full responsibility to spend and pay for the card yourself. Be sure to do this responsibly in order to build a good credit history.

Pay off the balance right away

Start using your credit card to establish good credit. A credit card is a tool in managing your money and building a budget. Make small purchases using your credit card that you have the money to pay for. Then pay off the balance when your statement arrives. This will begin a credit history of you making payments on time.

Applying for a credit card

Credit cards come with different rates, fees, features and benefits, so be sure to do your research when choosing the right card for your needs as a college student. Be a smart consumer. When owning a credit card it is essential to maintain good credit by paying your bills on time and not over-spending.

Why good credit is important

Building a strong credit history is important, especially when it comes to applying for loans such as student loans, car loans and mortgages. Find tips on establishing and maintaining good credit.

Learn more tips to help with student budgeting

Find more student budgeting resources to help you manage your money and helpful student banking information. Also, if you are looking for additional student financing options, an affordable Citizens Student Loan™ may work for your situation. If you still have questions, call a student loan specialist at 1-888-411-0266, and we'll help walk you through the process.

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