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12 Essential Credit Card Tips for University Students

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Last Updated on October 6, 2023 by Alexandra Markin

Just like getting good grades, everyone can master excellent credit card management with practice. This post outlines essential credit card tips, written specifically with university students in mind.

A credit card is an important tool. If used responsibly, and in conjunction with a rewards program that aligns with your lifestyle, a credit card can actually contribute to your overall financial success.

No matter how old you are, whether you’re just starting your undergraduate degree or going to grad school, it’s never too late to improve your finances.

Essential Credit Card Tips for University Students

Good credit card management builds a good credit score, and a good credit score is essential to living well.

Don’t wait until you’ve graduated to start building good credit – start now.

credit-keeper-score
My TransUnion credit score as of December 12, 2022.

Part of the reason I have such a high credit score is because I meticulously monitor my credit card account. Using a credit score tool helps you know where you stand.

I use Credit Keeper developed by Capital One. Credit Keeper is a free online tool that gives you access to your TransUnion credit score for free, and you don’t have to be a Capital One customer to use it.

For more helpful tools and resources for money and everything student related, check out the Student Resources page.

A higher credit score = more power to live life on your terms.

– Online Student Life

You can achieve financial success if you’re serious about putting in the work. Here are the best credit card tips that contribute to effective credit card management, whether you’re a student or not.

1. Learn to Read and Understand the Fine Print

Have you ever actually read the Cardholder Agreement of your credit card? How about the Certificate of Insurance?

For the very few people who actually do read these important legal documents, do you actually understand them?

Law and finance students will be all over this one, but just because your degree isn’t in these areas doesn’t excuse you from reading the fine print.

The moment you apply for a credit card means you have accepted their terms and conditions, whether you understand them or not.

You have no excuse for not knowing your credit card terms. It’s your responsibility to read the terms and conditions and be familiar with them. If you don’t understand something, call your credit card company for clarification.

Having a working understanding of legal documents is a must if you want to succeed in life, especially those documents that apply to your everyday life.

2. Use Your Credit Card Consistently

This one may seem obvious, but you have to demonstrate to credit bureaus that you actually use your credit card every month in order to build credit. However, you don’t need to charge a large number of transactions or expensive items to do this.

Only charge what you can afford to pay off in full each month, even if this means only charging a few purchases that total $50. Small charges paid off in full at the end of the month are better than only using your credit card for emergencies.

3. Check Your Account Activity Daily

Log in to check your balance and transactions every single day. No transaction should be a surprise. Credit card fraud can happen anytime, and the best way to mitigate it is checking your account regularly.

If you can’t check your balance daily, you should be logging into your account at least once a week.

4. Enable Account Notification Alerts

To Help Save Money

This is one of those little-known credit card tips especially helpful for university students because it can help you spend less.

Most credit cards have a feature that allows you to enable notification alerts directly to your phone every time a transaction is made on your account.

When enabled, this is an extremely valuable feature.

For example, let’s say you’ve signed up for an Amazon Prime Student 6-month free trial. Once your 6 month trial period has ended, your credit card will notify you that Amazon is charging your card for the monthly payment. If you decide at that time that you don’t want to continue with the Amazon Prime service, you can cancel your membership and get a refund for that payment if you act fast enough!

You can use this tip for all your monthly subscriptions, such as HP Instant Ink, Netflix, virtual private network (VPN), etc.

To Help Prevent Fraud

Not only can enabling alerts help you save money, it can also help prevent large fraudulent transactions, which I found out by personal experience.

Sometimes, credit card thieves who get possession of your credit card number try to charge a small amount first to test if the card number they stole actually works. With account notifications enabled, l was able to see in real time that there was a transaction on my credit card that I knew I didn’t make. I called my credit card company immediately before the thief tried to make another transaction. The alerts enabled me to take immediate action to stop the theft on my card before any further damage was done.

5. Pay Off Your Balance in Full Every Month

If you want to be financially successful, you need to get to a place in life where you pay off your balance in full, every single month. This is one of the best credit card tips all university students should master to make your card work for you, not against you.

It’s also the only way to avoid paying any interest.

A 20% off sale on pretty stationary doesn’t mean much if you’re carrying a balance with an 18% interest rate on your credit card.

If you aren’t able to pay off your balance in full at the moment because you’re a full-time student that can’t work a part-time job, don’t worry. Make paying off your balance one of your goals while actively implementing the other tips in this post to help you get there.

6. Make at Least the Minimum Payment

Even if you can’t pay your balance in full every month, always make at least the minimum payment as stated by your credit card company.

The minimum payment is the least amount of money you must pay per month to keep your credit card account in good standing.

7. Always Pay on Time

Whether you pay in full or just make the minimum payment each month, ALWAYS pay on time. Any late payments will decrease your credit score.

Set a reminder in your calendar for a few business days before the due date. Or, do what I do: set up an automatic payment so your balance (or minimum payment) is paid automatically each month. I do this with all my bills. This way, the only thing you need to worry about is having enough money in your bank account to cover your bills, and you’ll never have a late payment again.

8. Review Your Statement Every Month

Errors on statements occur all the time, and it’s your responsibility to catch them. This is why reviewing your credit card statement every month is critical.

Just a reminder that a month doesn’t necessarily mean the first day of the month to the last day of the month. Everyone’s monthly statement period is different depending on when you were approved for the card.

Know what your monthly statement period is and review every transaction.

9. Never Take Out a Credit Card Cash Advance

Just forget this is even an option on your credit card. A cash advance is a feature on most credit cards that allows you to withdraw cash at a bank or ATM.

BEWARE: using this feature comes with a hefty price tag.

Depending on what your Cardholder Agreement says (that you’ve now read and understand), cash advances often have a higher interest rate than what your purchases are charged at, and in addition, often have a flat fee that is charged every time you take out a cash advance. There is also generally no grace period for cash advances, meaning that you are charged interest from the second you withdraw. Even if you pay off your balance in full every month, if you take out a cash advance there will always be interest charged.

A financially smart student NEVER takes out cash advances. Be prepared and always keep cash at home in various denominations.

10. Plan Your Spending to Avoid Overspending

Plan your spending to avoid impulse purchases. Unplanned spending can be tempting, especially with all the cool study accessories you see on Instagram.

While it might be fun to have a large stationary collection, a new iPad or the latest desk trend, ask yourself if it’s worth it. Only buy what you really need, but don’t forget to budget in a treat for yourself once in a while!

If you’re looking for ways to save money while you earn your degree, read the post on How to Save Money as an Online Student for valuable tips that can save you hundreds of dollars per year.

11. Monitor Your Credit Utilization Rate

This is one of those credit card tips that even university students with the best credit card management skills miss, and it’s an important contributor to a high credit score.

A credit utilization rate is the amount of your total credit limit that you’re using (the amount owed) at any given time divided by your total credit limit.

For example, say you’ve spent $1,000 on your credit card and your credit card limit is $2,000.

$1,000 / $2,000 = 0.5 x 100 = 50% credit utilization ratio.

According to the experts at Capital One, your credit utilization rate should be kept under 30% – just another reason why tracking your spending is so important.

12. Do Your Research on Student Credit Cards

If you need a student credit card, conduct your research thoroughly. Don’t get swayed by bonus offers or the urgency of introductory time limits imposed, for example “Offer expires by November 30!” There will always be another “bonus” offer that will come along next.

The best student credit cards have the following features:

  • Low interest rate (if you know you’ll be carrying a balance).
  • No annual fees.
  • Rewards that are relevant to you.

If you apply to a student credit card that offers travel rewards but you don’t plan on travelling much, a cash back card might be a much better reward that you could use towards food or housing.

Credit card management is extremely important, especially for students.

Remember: credit card companies are in business to make money off your poor credit card management skills, so don’t let them win.

If you’re a university student, share your thoughts or questions in the comments below!

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