Four Credit Card Mistakes College Students Make

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“Yay, money!” If you are a student, that’s probably the first thought that crosses your mind when you see a student credit card with a generous spending limit. Unfortunately, credit cards match the proverbial “double-edged sword” cliché to the T. Used correctly, they can be great tools toward building a strong credit history and a powerful financial foundation; conversely, common mistakes could derail your future for a minimum of seven years.

Here are some common credit card mistakes you must avoid:

Spot and hop

“Spot and hop behavior” refers to the habit of applying for the first credit card offer that comes your way. From annual fees to high APRs, you could end up spending a lot more than what you would want. Take your time to compare different credit card offers before zeroing in on one that best matches your needs.

There are plenty of online tools that will allow you to compare offers and choose a credit card that is designed with you in mind.

Applying for cards without ascertaining your needs first

You must apply for a credit card that suits your lifestyle and personality. One size never fits all when it comes to credit cards. If you travel frequently, then a rewards credit card could be great for you, but if you are going to buy text books next month, a cashback credit card may be much better. On the other hand, if you drive every day to school, a gas rewards credit card could save you more money.

If you are going to spend money, might as well get something in return. One caveat, though. Always try to repay the sum you spend on time. The slightest delay could cause you to lose all the benefits and cost you more instead.

The “I will pay you later” strategy could backfire seriously

Don’t fall for the minimum payment trap. Credit card companies stand to benefit from interest payments and other finance charges if you pay less than the full amount. If you are short of funds, try to pay off the full balance as quickly as possible. A small slip on your payment schedule could trap you in debt prison for many years to come.

Always try to pay more than the minimum and whenever possible, in full. In addition to avoiding debts, you will also be building a healthy credit profile.

The fine print is boring, but don’t sign up without understanding the terms

Would you write out a blank check to a stranger? If you don’t read your credit card’s fine print that is exactly what you will be doing. From late payments to trigger points that could spike your interest rates, there are so many ways credit cards could levy penalties on your account. If you don’t understand your credit card provider’s terms and conditions, you will have agreed to all of their terms without your explicit consent. That could be dangerous.

Nimish Thakkar is the CEO of The site allows you to compare student credit card offers from various companies.

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