Pros & Cons of Opening a Credit Card in College

by Spero Financial

Tuition, financial aid, and campus meal plans usually top the list of college-related financial concerns, but when it comes to day-to-day finances, parents and students face another question: Should a student open a credit card while they’re in college? Some financial experts recommend it; others discourage it. The answer depends on who you ask. If you’re trying to figure out whether opening a credit card in college is right for you, here are some pros and cons to consider.

Pros of Having a Credit Card in College

  1. Establish your credit rating.
    Like it or not, a credit rating is an essential part of life in today’s society. If you’re hoping to move out on your own one day, buy a car, or even purchase your own cell phone, you’ll need a solid credit rating. By opening a credit card and keeping your balance under 30% of your available credit, you can start building a positive credit history that will make your life easier in the years to come.
  2. An early start leads to a longer credit history.
    In the previous point, we mentioned that future plans like apartments, cars, and utilities usually depend on a good credit rating. Length of credit history is one of the primary factors of a good credit rating. So, the sooner you begin managing a credit account, the more time you’ll have to secure a strong credit rating. Introductory credit cards offer a relatively safe and simple way to start your credit journey.
  3. Gain practical financial experience.
    If you’re a college student living on campus, you have to manage more than just your class schedule. Being on your own (or at least out from under your parents’ roof) forces you to handle your own day-to-day finances. By opening a credit card during your college years, using it responsibly, and keeping up with your monthly payments, you can learn valuable budgeting skills that will benefit you long after you’ve completed your degree.
  4. Cover emergency expenses.
    Most financial advisors recommend building an emergency fund of at least $1,000–but this can be tough to do when you’re in school full-time. For many college students, a first-time credit card can be a much better option for covering unexpected expenses than relying on predatory lenders and payday loans. That being said, if you’re going to use a credit card to cover emergencies, it’s critical to understand what an emergency really is. According to the experts at, a legitimate financial emergency is unexpected, necessary, and urgent. (Sorry, with those guidelines, late-night pizza cravings don’t count.)
  5. Earn valuable perks and rewards.
    When you’re a college student trying to make ends meet, you take any help you can get. If you open a credit card that offers incentives such as airline miles, travel discounts, or cash back, using it for day-to-day purchases and paying it off each month will let you rack up rewards that can make trips home much easier to afford.

Cons of Opening a Credit Card in College

  1. Credit cards reveal bad financial habits.
    It’s been said that money doesn’t change a person; it only reveals who they already are. Credit often does the same thing. If you haven’t established smart financial habits before opening a credit card, it’s unlikely that having access to a credit limit will change your established patterns. If you want to open a credit card while you’re in college, that’s fine. Learn to live on a budget first.
  2. Spending doesn’t hurt.
    Have you ever had a $20 bill in your wallet and passed up on an impulse purchase because you didn’t want to break that $20? That’s because cash transactions involve a physical exchange of your hard-earned money for something else. On a psychological level, that decision hurts a little. Credit cards eliminate that “pain” associated with spending, which makes unwise purchases all-too-easy.
  3. It can be hard to keep up with payments.
    It’s challenging to hold down a job while taking full-time college classes—especially for first-year students. If you’re not able to work while you’re in school, it can be challenging to keep up with a credit card’s monthly payments. The negative impact of a single missed payment can be costly. Not only will it incur an expensive late charge, it can also cause your credit score to drop.
  4. Credit cards could add to college debt.
    Ask anyone with a credit card whether they planned to pay off their balance every month when they first opened their card, and they’ll probably say yes. However, recent figures show that the average credit card holder owes more than $6,000 on their cards. Statistics also show that the average college student graduates with nearly $30,000 in student loans. Without careful planning, opening a credit card could saddle you with additional debt, limiting your financial freedom before you even graduate.
  5. Intro offers don’t last forever.
    No interest. No balance transfer fees. Extra cash back on specific purchases. Most credit cards extend attractive introductory offers to new account holders. And while 0% interest for the first six months sounds good, it makes it tempting to skip a payment and tell yourself you’ll just catch up next month. What’s dangerous about that? After the introductory period, many first-time credit cards default to higher interest rates. A $500 balance with 0% interest is manageable. That same balance with a 24% interest rate can leave you unable to pay more than just the minimum balance. Be sure to read the fine print on any introductory offers. The more you know, the better you’ll be able to manage your money.
If you’re thinking about opening a credit card while you or your child is in college, Spero has the solution you need. With no annual fee, no cash advance fees, no balance transfer fees, and a 25-day grace period on all purchases, a Spero VISA® Credit Card offers the credit you want and convenience you deserve. Apply online or stop by one of our branches to fill out an application.

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