When to get your first credit card

College student holding credit card and shopping on internet

Use these three questions to help figure out if you need a credit card, and if you do, check out some considerations for which card to pick.

Do you find yourself wondering if you need a credit card to finance future purchases while in college? Having a credit card can be convenient and financially empowering, but it also requires a lot of smart money management skills. Credit cards can quickly lead to financial trouble if you abuse them.

Use these three questions to help figure out if you need a credit card, and if you do, check out some considerations for which card to pick.

Three questions to help determine if you need a credit card

1. Why do you want a credit card?

Wanting a credit card so you can start building credit is a valid reason to look into applying for one. But if you only want a credit card so you can spend more money than you have in your wallet or bank account, think twice about this decision. It might be best to stick to cash or a debit card so you’re not tempted to overspend.

Your good and bad habits paying your credit card bill will ultimately be reflected in your credit score. Your credit score is an important measure of your financial health. It’s what lenders and financial institutions use to help determine if they will offer you a loan (and how much you can borrow at what interest rate).

If you use a credit card responsibly, it can help you establish a positive credit history from an early age. That will benefit you as you head off to college and start to consider taking out student loans, financing a car, or renting your own apartment.

2. How will you pay off your balance each month?

You need to make sure you can pay off anything you charge to your card, on time and in full. Make sure you have a plan for repaying your balance every time your bill is due. If you don’t, you’ll pay interest on that balance and start building up debt.

3. Are you 21 or under?

The CARD Act of 2009 aimed to protect college and high school students from getting credit cards before they were ready for the responsibility. If you’re under the age of 21, check with your financial institution for information on their requirements.

Considerations before you apply

If you decide that it makes sense for you to have a credit card in your name, here’s what you’ll want to know before you actually apply.

Do your research. With a large number of credit cards available, you may want to do your research and consider cards specifically made for first-time cardholders. You might want to look for features such as:

  • Low Annual Percentage Rates (APRs). APR is the periodic rate, expressed as an annual amount, used to compute the interest charge on an outstanding balance. On many cards, you can avoid paying interest on purchases if you pay your balance in full by the payment due date each month.
  • 0% APR for an introductory period.
  • No annual fees.

Some reward cards offer points, which can then be redeemed for merchandise or to pay for travel. It might be tempting to look for reward cards, but be cautious. It’s easy to get sucked into spending more than you need and charging too much on your credit card because you want to get more points.

For your first credit card, keep it simple and prioritize a fee-free card over one that offers some kind of reward. If you decide you want to make the most of the purchases you need to make anyway (like gas or groceries) try a cash back card that can help you save a little extra money.

Consider secured cards. Secured credit cards require you to make a cash security deposit. Your security deposit is equal to your credit line — for example, if you deposit $300, your credit line is $300. This makes it a lot harder to spend more than you can truly afford.

Talk to your parents. If they support your decision to get a credit card, they can help you research credit card options and find the right one for you. Depending on the credit lender, they may be able to add you as an authorized user on their card. As an authorized user, you’d have your own credit card, but your parents could see your charges and would be responsible for paying for your transactions.

While you may be ready to be financially independent, it’s smart to have a conversation with your parents before trying to get your own card. You can decide together what makes sense for your situation.


Want to read more about using a credit card responsibly?

Wells Fargo Chat

You can customize your experience with a quick chat

Related articles