Last year, we published an article on why you should get a college credit card, and if you followed our advice, we hope you have reaped the benefits. If not, you should seriously consider signing up for a credit card while in college to begin building a strong financial future for yourself. Read on for more on the benefits that getting a credit card in college can offer you.
1. You’ll Build a Credit Score
What is a credit score? A credit score is a three-digit number that lenders use to determine whether or not they should lend money to you, what amount they are willing to give you, and what interest rates they will offer . Your credit score reflects your financial history, so if you pay the full amount you owe on your monthly bills on time, you can build your credit score and prove you are capable of handling your personal finances. While most credit rating agencies scores range between 300-850, and most lenders consider a score above 700 to be satisfactory. Most credit cards allow you to see your FICO Credit Score for free. You will earn your first credit score after you’ve had your credit card for about six months, so starting now means that you’ll have a credit score before the end of the academic year. Not only will you have good practice with paying your bills in a timely manner, but post-college, having a good credit score will make renting an apartment or buying a car much easier. For future entrepreneurs, a credit score is essential if you’re looking to borrow money to open a small business.
2. You’ll Earn Cash Back Rewards
Another huge advantage of credit cards is that they offer cash back rewards. For example, some credit cards offer 2% cash back bonus at gas stations and restaurants. For college students who aren’t driving, the gas benefits may not be useful, but we can definitely benefit from the cashback offered at restaurants. Essentially, for every $100 you spend at restaurants, you’ll earn $2 credited towards your account, which you can use to help pay your bills, and in some cases, as points to redeem for Amazon purchases. To find the best card for you, you should do some. For cash back credit cards, you can start your research here. Once you have some experience with your credit card and, are enjoying its benefits, you can often refer a friend to earn a cashback bonus for yourself.
3. Exclusive Offers
With credit cards, you can also gain access to some exclusive offers. Many credit card issuers partner with various companies to offer special benefits to their cardholders. These partners may include Starbucks, Uber, retail companies, and more. Checking the deals that your card company offers before going on a big shopping trip or buying something online can help you earn even more in cash back. Additionally, credit card companies may offer their customers other products, including personal loans, student loans, and certain types of online savings or checking accounts. Having a credit card opens up financial possibilities for your time in college, and beyond.