5 Tips for Using Your Student Credit Card Responsibly

Getting a student card in the early days of your college can help you establish a good credit history. As you embark on your credit card journey, you should be aware of the important tips for using your student credit card responsibly. As a student, you won’t understand it fully but it is important to comprehend that credit cards are not just for buying stuff but they hold greater value when buying a home or lending a loan for a car or other big purchases.

The key to make the most out of the credit card is through its responsible usage. If you don’t want to see yourself buried under extensive debt, then have a look at the important tips for using your student credit card responsibly that would have a positive financial impact.

Quick Overview: Essential Tips for Using Your Student Credit Card Responsibly

1. Pay your credit card bills timely
2. Say no to cash advances
3. Try to keep your credit utilization low
4. Maximize your rewards through credit cards
5. Try to avoid the annual fee

1. Pay your credit card bills timely

Credit cards are a viable way to create a great credit history that can be beneficial to you in the long run. If you don’t pay the full monthly payment you would end up doing more harm to your credit history. Among all the tips for using your student credit card responsibly, this one holds crucial importance as this can save you from additional interest charges. Since payment history is one of the important factors in determining the credit score it requires the undue attention of the users.

As a student, if you resist the temptation of spending more than your current income, you can make the monthly payment on time. There is a popular phrase that states “ Not biting off more than you can chew” is the first lesson to remember while learning the responsible use of the credit card. Moreover, setting up automatic monthly payments can help you miss the deadlines of bills and potentially reduce the negative impact on your credit score.

2. Say no to cash advances

Credit cards give users the ability to withdraw money for important and big purchases. One of the essential tips for using your student credit card responsibly is to say no to cash advances. As you take out the cash advance , the issuer will charge you an interest rate ranging from 2%-5%. This interest rate may seem minor in numbers but as a student, it’s hard for you to repay.

In most of the credit card offerings, the APR is relatively high for cash advances in comparison to purchases. The “ Buy now pay later” tag seems alluring at the start but the moment you have to pay money back with high-interest charges you will regret it. Therefore, it is good tip among the other tips for using your student credit card responsibly by carefully tracking your spending and saving money from your income for big purchases.

3. Try to keep your credit utilization low

 If you pay a lot of heed in paying your credit card bill for full month then getting close to the credit limit also has a negative impact on the credit score. As per the sayings of professionals, the credit utilization ratio should be kept to 30%.

 For instance, if the credit card limit is $10,000, you would want to avoid having a total of $3,000 in charges at any given time slot. The best way to track expenses is to set up balance alerts, pay the full balance on time, and lastly avoid exceeding the 30% threshold.

4. Maximize your rewards through credit cards

Many of the student credit card options offer valuable rewards that are easy to avail and redeem. One such example is the Capital One SavorOne Student Cash Rewards Credit Card offers 8% cashback on tickets and all other purchases that are made through the Capital One Entertainment portal. Moreover, you can also earn 3% cash back on entertainment, streaming services, and grocery stores while flat 1% cash back on all other purchases.

For students, it is important to understand that they don’t rush for rewards but it the integral tip for using your student credit card responsibly is to make the smart decision to choose the card that fit well with your needs and budget.

Best Student Credit Cards

Student cards are generally regarded as a great way to build your credit history and gain rewards on everyday purchases. With multiple card options in the market, it is difficult to find the right one for you. To ease this process, we have compiled a list of the best student credit cards based on factors such as rewards programs, annual fees, and credit score requirements. Along with the important tips for using your student credit card responsibly, you should keep in mind the above factors.

Most student credit cards offer some type of rewards program, such as cashback, travel points, or miles. Consider which type of rewards are most important to you and choose a card that offers a good rewards rate. After considering the reward program and using the important tips for using your student credit card responsibly, you can reap the full-fledged benefits of credit cards.

Student credit cards are typically easier to qualify for than regular credit cards, but they may still have some credit score requirements. Be sure to check the credit score requirements for each card before you apply. In addition, only a few student credit cards have annual fees, while others do not. If you’re choosing a card with an annual fee, make sure the rewards and benefits outweigh the cost.

5. Try to avoid the annual fee

As a student, you must have a low budget so it is preferable to give preference to credit cards with no annual fee. The annual fees may be worth it if the card offers extra perks, discounts, and cashback on purchases.

Since it’s the start of the credit-building journey, it is advisable to avoid paying annual fees. The best student credit cards usually charge minimal to no annual fee, so the accounts remain open for a long duration of time.

Frequently Asked Questions