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Resisting the urge to open up a credit card at your favorite department store, paying for Spring Break with plastic, and the appeal of buying now and paying later is sometimes so tempting for college students. The truth of the matter is that while in college, there is an opportunity to begin building your credit so you will be able to buy a house or car once you graduate. You should never have to wonder if you’ll be approved for a mortgage or a loan because you have no credit history or you really screwed up your finances while in college. Take a look at our helpful tips and advice on how to build the most important score of your life with a student credit card. If you have any questions on what the best card could be for you to open to pay for things you were going to buy anyways, please contact us.

This article was contributed by guest author Matthew Coan.

Image by frankieleon, Flickr

Image by frankieleon, Flickr

Being a college student comes with a ton of daily decisions you have to make. You want make the most of your time and your money, get good grades and keep up relationships with friends and family, all while trying to find time to get quality rest. So when it comes to getting a credit card, you want to make the process as simple as possible, but you also don’t want to take it lightly – we’re talking about maximizing the money you’re spending. There are some factors you need to consider before choosing which credit card is best for you:

Your Credit Score

Credit card companies don’t just hand out credit cards to anyone. When used responsibly, getting a credit card while in college can be a good thing, and can make your financial life after graduation much easier.

Your current credit score will come into play when applying for a credit card. Just like your GPA is a reflection on how well you’re doing in school, your credit score is a grade on how well you pay back money that you borrow – which is what you’re doing when you spend with a credit card. You do not have to prove that you have the money in your possession when you buy something with a credit card; you just have to be able to pay it back at the end of each month when your credit card payment is due. If you have some form of a credit history (which can include a car loan, rent, student loans) then you will have a credit score. If your credit score is good, you will have many options when it comes to choosing which credit card you want. If you have bad credit, or do not have any credit history, there are still options, such as student credit cards and secured credit cards.

Interest Rate and Fees

One of the most important things to learn about credit cards is how interest works. If you do not pay your bill on time or do not pay it in full each month, you will be charged interest on what is left. So basically, you are paying money for spending money. With a credit card, you need to be diligent in paying off what you spend on it. Just because you have a credit card does not mean that you need to use it to pay for everything. If you know that you have the money to pay it off, then use your credit card to spend, possible earn some rewards (see below), and use it to increase your credit score. Not paying your bill in full each month will end up costing you more money and making your financial life more difficult than it already is. But on the off chance that you do miss a payment, or cannot pay off your credit card balance in full, you need to know what interest rate you will be paying – an important factor when it comes to researching credit cards.

Fees are another variable that you need to do some research on. When you miss a payment, or are late, there will be a fee that you have to pay. Again, you will be paying money for spending money. If you go over your credit limit there could be a fee for that as well. Some cards even come with monthly fees. Read all of the fine print on the credit card you are researching to understand the fees that could be associated with it.


Yes, there are credit cards that offer rewards for spending money with them. What pays for these rewards? The people who do not pay their bill in full each month and end up paying interest. But, as we said above, if you pay your bill on time and in full each month, you won’t pay any interest and you can take full advantage of the rewards that credit card companies offer. These rewards come in the form of cash back, free to discounted travel, or points that can be used for just about anything. There are even student credit cards that offer rewards for having good grades. So when looking at which credit card is right for you in college, take a look at the rewards that each card offers and see which card can maximize the money that you are spending.


Now that you know the factors you need to consider when choosing a credit card, you need to do some research. Knowing your credit score will make this process a lot easier. You don’t want to apply for credit cards that require an excellent credit score when you don’t have one. Companies like Equifax and TransUnion are dependable and will mail you your credit score. You may even find a rewards credit card that comes with a great sign up bonus, as they sometimes have offers that cannot be found anywhere else. And of course, when in doubt, head to your bank and talk to a financial services representative about what your options are. After you obtain the credit card that you want, and use it responsibly, you will be on your way to getting the most out the money that you spend by increasing your credit score and earning some nice rewards in the process.

This article was contributed by guest author Matthew Coan.

Image by frankieleon, Flickr

Image by frankieleon, Flickr

It’s a milestone, a rite of passage that marks the journey into adulthood: holding your very first credit card with your name in shiny, raised letters.

There’s a sense of freedom in the moment – you can go buy things, no matter what your bank balance shows. But before you peel that “Activate your card now” sticker off and head out to your favorite stores, make sure that you have a handle on what’s about to happen.

Choosing a Card

Card issuers offer a variety of incentives to attract new users. These offers can include waiving the annual fee, zero interest fees for the first year or bonus points that can be put towards future purchases. While the incentives may be appealing, it is important to remember that they are typically temporary. Check out what happens when the initial ‘new card’ phase is over before applying for a card.

Know the Basics

Before using your card, it’s important to have a clear understanding of the card’s key criteria.

Annual Percentage Rate
Annual Percentage Rate (APR) is the yearly rate of interest on your credit card. Determined by using an index (such as the U.S. Prime Rate) and adding the bank’s margin, the APR is a method of assessing fees on credit card usage.

The APR for a card can change over time. For example, the card might have an introductory rate or a promotional rate (applicable to balance transfers).

Higher APRs are assigned to individuals with lower credit scores. As both your credit reputation and score improve, see if you can get a lower rate.

Start by talking to your bank and requesting a lower rate. “It’s a simple phone call, and the worst they can say is no,” says Patricia Hasson, executive director of Consumer Credit Counseling Service.

Interest Fees
By calculating the Daily Periodic Rate (the APR divided by 365), credit cards assess fees based on the amount charged on your card. These fees can vary, based on card polices and variable APR rates. Some cards offer an initial grace period for interest fees or offer one year of low interest as an incentive to use their card.

Minimum Payment
The lowest amount of money a cardholder is required to pay each month is known as the minimum payment. Each card has its own formula for determining the minimum payment due, specified in the card agreement.

Card Smarts

Unchecked spending can lead to financial disaster. Before you start swiping the card, make a plan of action.

Use Your Power Wisely
The secret of successful credit card usage is understanding that just because you CAN charge something doesn’t mean that you SHOULD. Credit card use should be filtered through a need vs. want criteria. Taking your credit card out of your wallet when the purchase is a legitimate need will help prevent excessive credit card debt and abuse.

Cash Advances Can Really be a Set-Back
Sometimes, you really ‘need’ some cash. That cash advance option on your card is tempting, but what are the long-term effects of hitting the ATM? Interest rates on cash advances are calculated differently than on purchases, resulting in higher fees and a reduction in your available credit.

Rich Bialek, a credit card industry expert, said, “A cash advance typically would involve a higher APR than a retail purchase because the card company doesn’t earn a merchant fee on a cash advance.”

Keeping an Eye On the Bottom-Line
Most cards come with a credit limit, a maximum amount that can be charged. Spending over that amount can result in additional fees and fines, which can quickly add up. Keep control of your card usage by paying attention to your credit limit and staying under it.

Know Your Chargeback Responsibilities
Chargebacks are a consumer protection mechanism. If you experience fraud, either from a business owner or a criminal, you have the right to a refund. A chargeback is a forced credit card refund, facilitated by the bank that issued your card.

However, chargebacks should only be used in extreme circumstances as a last resort. You should always try to get a refund from the merchant directly before contacting the bank. If you dispute a transaction with the bank instead of dealing with the merchant, you’re engaging in something called friendly fraud. Merchants consider this illegitimate use of the chargeback process to be cyber shoplifting.

There are major consequences for businesses when chargebacks are filed. A credit card expert, Monica Eaton-Cardone, said:

I don’t think the majority of consumers who file friendly fraud chargebacks are doing it to create a consequence. I think… they are ignorant to what really happens behind the scenes. They think that it is just their bank giving them the money back.

Don’t be ignorant of your credit card responsibilities and liabilities.

Paying Off Debt

Using your credit card is easy, but paying it off just doesn’t have the same ‘fun factor.’ However, it’s a necessary part of the credit card system.

Save the date
Many credit card companies allow you to choose your own due date – a feature that can come in handy for planning purposes. Choose a date that is just after payday to ensure that you have funds available to make your credit card payment. Making your payment on time is an important factor in building your credit and preventing additional fees for late payments.

More Than the Minimum
Your credit card statement will tell you the ‘minimum payment’ that you must make to be in compliance with your cardholder agreement. As long as you pay the minimum amount due each month, your account will stay in good standing.

The reality, however, is that by making the minimum payment you may end up paying for items years after your initial purchase. Your interest is calculated on the amount of credit used on the card, increasing the amount you’re actually paying back by sometimes hundreds of dollars. To maximize your credit, make more than the minimum payment each month. Ideally, you should pay the entire balance off every month.

Anisha Sekar, a contributor to Nerd Wallet, also points out that paying the minimum can hurt your credit score:

Thirty percent of your credit score is determined by how much debt you carry… This means that accruing charges on your card and failing to pay them off is like putting a dent in your credit score every month; over time, this adds up to a lot of damage.

Check Your Status

Using credit cards is both good and bad. Used wisely, credit cards can be helpful in an emergency or for making large purchases. Used improperly, however, these cards can have a negative effect on your credit – a result that can haunt you financially for years.

Monitoring your credit is important. Credit bureaus offer consumers free credit reports annually and many credit card companies offer credit reporting as part of their services. Checking your credit report not only lets you see what your financial habits look like, it allows you to keep an eye on any fraudulent activity on your accounts.

Think Long Term

Incorporating basic financial principles into your college education will help establish a reputable credit history that will benefit you for years to come.

Image by GotCredit, Flickr

Image by GotCredit, Flickr

Credit is fairly essential in today’s world. And at this stage of your life, there’s good news and there’s bad news. The good news is, you probably haven’t had a chance to ruin your credit just yet. The bad news is, you likely haven’t had the ability to build any credit history either. In order to get credit, you need a credit history, and it needs to be good. It’s important, however, that you know what you’re doing before you start building credit in order to avoid common mistakes that will haunt you and your credit score for years to come.

Take responsibility for your own finances and credit history

As a college student, you’ve already taken an important step towards moving into adulthood and making your own decisions about your future. Now, you need to go one step further and take responsibility and ownership for your finances and your credit. While you may still need some help from mom and dad, it’s a good idea to move into the mindset that the buck stops with you.

Learn to save, budget and track your finances

Once you’ve taken ownership of your financial situation, you can start controlling it. It’s never too early to start saving. This is a valuable skill that will serve you well your entire life, but one that most young people aren’t taught. Your first step should be tracking all of your finances – your incoming and your outgoing. Mint.com is a popular application for this task. This will demonstrate how you’re spending your money and help you create a workable budget. Resolve to stick to a spending plan and to pay yourself first by putting money into savings.

Don’t max out on student loans

Student loans are another thing that will follow you for many, many years. It’s important that you only borrow what you need. Look very closely at all the lending terms, such as the interest rate and repayment terms. Don’t just accept whatever the school suggests. Do your research and compare lenders. It’s a good idea to consider a part-time job while attending college to help offset your educational costs instead of relying entirely on student loans.

Educate yourself about credit and credit scores.

You’re in college, so you understand the value of education. Understanding how credit works, credit scoring and how your financial decisions impact all of this, are essential for building credit and making smart financial decisions. Many credit card issuers now offer several tools, services and tips to help card holders keep track of their credit score and their card usage, and to be responsible with their finances.

Get a credit card and use it wisely

Research credit cards that are available to college students (here are some). Don’t allow yourself to be distracted by “shiny” offers. Identify what you need in a credit card and look for those features. After you narrow down your search to 2 or 3 possibilities, carefully read all the terms and conditions to make sure there are no nasty surprises in store. Once you’ve chosen and received a credit card, treat it responsibly and respectfully. Pay on time every month. Don’t max it out, and keep track of your credit card spending on a regular basis.

Consider becoming an authorized user

Despite the large number of credit cards targeted towards college students, you may not be able to qualify for one right away. If this is the case, you may want to speak to your parents about being added on one or more of their cards as an authorized user. Being added as an authorized user with bad credit or no credit can be a very effective way to boost your credit score and enable you to then qualify for your own credit card so that you can begin building credit through experience. Your parents can use this method to help you start on the path towards a long and excellent credit history.

This article was contributed by guest author Michael Austin.

Image by StockMonkeys.com on Flickr

Image by StockMonkeys.com on Flickr

From textbooks to late night pizza runs, you’re going to make a lot of purchases in university. Since you won’t always have cash on hand, credit cards become very useful. Student credit cards are a great first credit card for students because they are specially designed for students and usually don’t require an income. By getting a credit card early and paying off all of your monthly balances on time, you can establish a good credit score which will help you later in life when you buy a car or a home. Here are just a few credit cards out there, and the benefits they offer:

Annual Fee

Purchase Interest Rate

Extra Perks




  • 1 AIR MILES reward mile for every $20 you spend on the card
  • SPC (Student Price Card Ltd.) discounts of 10% to 15% at hundreds of your favourite stores
  • Earn 1.25x CashBack at Shell locations in Canada
  • Earn 1.5x CashBack and get up to 25% off rentals at National Car Rental & Alamo Rent A Car locations worldwide
  • Limited time offer: 500 Bonus reward miles

BMO SPC CashBack MasterCard



  • Earn 0.5% CashBack on all purchases
  • SPC (Student Price Card Ltd.) discounts of 10% to 15% at hundreds of your favourite stores
  • Earn 1.5% CashBack at Shell locations in Canada
  • Earn 1.5% CashBack and get up to 25% off rentals at National Car Rental & Alamo Rent A Car locations worldwide

L’earn VISA Card



  • Earn up to 1% Moneyback on the purchases you’ve made with your card
  • 20% discount rates at Avis Car Rental

mbna rewards Studentawards credit card



  • Earn 1 mbna rewards point for every qualifying $1 spent on retail transactions
  • 1,000 bonus points after your first qualifying purchase
  • 1,000 bonus points each year on your account anniversary date
  • Redeem points for cash back, travel, brand-name merchandise, gift cards from top retailers and charitable donations
  • Show school pride with a specially designed card for your university/college

RBC CashBack MasterCard



  • Earn 2% cash back credits on grocery store purchases
  • Earn up to 1% cash back credits on all other purchases




  • Earn 5 SCENE points for every $1 spent at participating Cineplex theaters, or online at cineplex.com
  • Earn 1 SCENE point for every $1 spent on all other purchases
  • Limited time offer: 4000 bonus SCENE points with first purchase (enough for 4 free movies)

Once you’ve chosen your card, be sure to use it responsibly. Check out our article on avoiding credit card mistakes to learn how!

Image by Philip Taylor PT on Flickr

Image by Philip Taylor PT on Flickr

Credit cards are a great way to make purchases, if you’re careful. Some credit cards offer reward points, cashback, discounts, extended warranties and other perks to help make the most out of your money. However, there are also risks associated with using these cards. From identity theft to an unpaid balance, credit cards can put you in a lot of trouble. Here are some tips on how to steer clear of common credit card mistakes:

  • Spend what you can afford. This may be a no-brainer but some people tend to forget how much money they actually have when their credit limit is really high. If you can’t pay for it, don’t buy it!
  • Keep track of all of your spending. Not only will it help you make smarter purchase decisions and cut down on excessive spending but it will also help you when you’re a victim of identity theft.
  • Keep your card safe. Identity theft is a huge issue and if you’re not careful, it can cost you greatly. Avoid suspicious websites and giving your credit card information to others.
  • Avoid annual fees. Don’t be blinded by promises of reward points and cashback when they also have a hefty annual fee. The price of the annual fee might end up cancelling out the price of all the rewards you’ve earned. There are plenty of other cards that offer these rewards with no additional annual fee.
  • Avoid making interest payments. In other words, pay off your balance in full each month. Paying the minimum each month may be enough to satisfy the credit card company, but it will also prolong and increase your debt. Especially since interest rates are really high on student credit cards (approximately 19%-20%), this can make it even harder to pay off that debt.
  • Don’t get one if you don’t think you’re ready. The whole purpose of getting a credit card as a student is to establish good credit history. If you are unable to pay your balance, this is going to hinder your ability to meet future financial goals. You need good credit to help make purchases like a car or a home in the future so be careful with your card!
  • Choose wisely. Don’t apply for the first credit card you see. Research different credit cards before choosing one. Check out our article comparing different student credit cards for help.

Check out this video on some more common credit card mistakes and how you can avoid them: