Editor's note: Wondering what's up with my shortened post titles, such as "credit card college" instead of "best credit cards for college students," for example? Google users are increasingly rushed (or lazy), and many of them are finding Credit Card Outlaw with shorter search terms. So we are testing out shorter titles to match.
Are you wondering if you should get a credit card while in college? Is college the right time to sign up for a credit card and build credit?
Not necessarily. I personally have weaned myself off of credit cards, and prefer the many benefits and equal convenience of debit rewards cards, which do NOT get you into debt and do NOT carry the risk of paying interest or spending more than you have.
I don't think you should get and regularly use a credit card until you have steady income. If you're in college and need extra money to pay for an extra class or textbooks, or drinking money, a credit card is your worst option. You will end up paying hundreds (or possibly even THOUSANDS) of dollars in interest if you pay down your balance slowly, over time, as most college kids do.
If you don't have enough money, avoid the credit cards. Instead, find a part-time job... either at your college, or retail (it's awful, but it pays, at least), or freelance as a writer, photographer, or even tutor (there's always someone on your campus dumber than you, and willing to get help with math, science, or English). A college tutor can command a salary of $20 per hour or greater.
I believe in spending only money you have in the bank. As someone who went into thousands of dollars of debt while in college, and then struggled to pay it off, I know what I'm talking about.
I'm financially comfortable now, and have plenty of money in the bank, but my lingering credit card debts from college were like a weight tied around my neck. It prevented me from building my business as quickly as I would have liked, and it was painful to pay high interest charges on stupid things I had bought or done a year ago -- an unnecessary vacation, textbooks I could have borrowed or read in the library, too many nights out drinking and pretending to be a rock star.
College is not the time to live like a rock star off of credit cards or personal credit lines. I know, all of your friends go out and spend money they don't actually have. You don't have to be like them.
Your college years are an absolutely fantastic time to develop frugal spending habits, and to get into the routine of saving or investing at least 15% of all you earn. If you develop these habits now, they will last you for a lifetime.
And when you're 30, instead of being sad and in massive debt like all your washed up friends, you will be comfortable and financially free. You will have a tremendous amount of freedom, to travel, live where you want, find a job that fulfills you, and not worry about paying the credit card bill.
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