When I was in college, I drove a lemon of a car. On my way home from work one night, my car broke down, and I was stranded on the side of the road. Without a credit card, no towing company would come and help me. I had to call a friend to come get me, and borrowed her card to call a tow truck later on. Having learned a lesson, I applied for my first credit card the next day.
When you’re in school, going without a credit card can be risky. If you’re thinking about getting a student credit card, here’s what you need to know about the benefits.
5 good reasons to open a credit card while in college
There are five reasons why opening a credit card while a college student is a wise choice.
1. You can start building a solid credit history
The earlier you establish your credit history, the better off you’ll be after graduation. Your credit report affects everything, from your chances of getting a job to securing an apartment. By opening a credit card now and making all of your payments on time, you can start building up a strong credit history.
If you wait until after college to get a credit card or other line of credit, your lack of a credit history could make it harder to get approved for a loan or even an apartment.
2. You’ll be able to pay for emergencies
If you’re faced with an unexpected emergency like I was — such as a car repair or illness — a credit card can allow you to cover the cost right away, and pay it back over time. Although running up credit card debt is rarely a good idea, charging a car repair bill so you can get to work or commute to school can be a smart choice in the long run.
Without a credit card, you could be left scrambling to come up with the cash, or you might have to go without. That could cost you your job or set you back in school.
3. You can start establishing good habits
Having a credit card takes discipline. If you wait until after graduation when you have a job to open a card, you might get overwhelmed or overspend.
Opening a student credit card limits some of the risk. Most student cards have lower credit lines, so you can only charge a limited amount. That can be an important guardrail as you get used to using the card and keeping up with the payments.
Getting in the habit of using the card responsibly and paying off your balance in full each month will help you build lifelong skills for managing credit.
4. You’ll get purchase protection
When you purchase an item with cash, you usually are at the retailer’s mercy. If the item breaks or is defective, you have to hope their return policy will accept the item back and refund your money. If they don’t, you might not have any recourse.
However, if you use a credit card, you might have purchase protection with the card. If there’s a problem, you can dispute the charge with your credit card company and get your money back.
5. You can get valuable rewards
If you forgo opening a credit card, you could be missing out on valuable rewards. Use a credit card for your routine expenses as a student, such as textbooks, gas, and groceries, and you could earn cash back.
For example, you can earn up to 1% cash back on all of your purchases with the Journey® Student Rewards from Capital One®. And, if you make all of your payments on time, you could get up to 1.25% cash back on purchases.
Those rewards can add up. If you used your credit card to pay for $1,500 worth of textbooks for the school year, you could get up to $18.75 cash back. That’s free money you get for making a purchase you would’ve made anyway.
Where to find student credit cards
Having a credit card as a student gives you some unique protections and benefits. Going without one can be a risky and even costly decision.
If you’re ready to apply for a card of your own, check out our list of student credit cards.
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