Common Credit Card Mistakes College Students Should Avoid

So, you’ve made it to college and you’re finally enjoying your first taste of freedom. Congrats! With all that freedom comes some newfound responsibilities, too — should you stay up late hanging out with your new friends, or head home early and study for that exam? Do you want to splurge on a cute new sweater? Pizza or salad? Sometimes it’s not easy to make the “right” decision — I mean, salad is good for you and all, but pizza is delicious!

Thankfully, when it comes to credit cards, we can offer some help in your decision-making process. College should be filled with all sorts of new opportunities — but credit card debt shouldn’t be one of them. Check out some of the most common credit card mistakes and how to avoid them.

Forgetting to Pay Your Monthly Bill on Time

A missed payment could result in late fees and higher interest rates. One way to steer clear of this pitfall is to set up automatic payments through your card issuer (Discover card has a DirectPay option). Another is to set up alerts through a variety of apps that track when payment due dates are approaching. Your credit card issue may provide a similar service. Discover Mobile, for example, allows you to set a reminder for when your statement is available, when a payment is due and/or when a payment has gone through. Done and done!

Spending More Than You Have

The impulse to spend more than you have can be hard to resist, but with a safety net in place, you’re more likely to stay in the clear. Consider a secured credit card, which limits the amount you can charge based on how much money you’ve deposited into a linked account. To break it down, once you are approved, if you deposit $300, your credit limit is $300. This option offers the card issuer built-in protection from a cardholder who might default on a payment.

It is not uncommon for those who are new to credit to get a secured credit card, because they don’t have enough credit history for lenders to assess how they are at paying bills on time. This is a great credit card that can be used to build your credit history, provided that you use your card responsibly and pay your balance in full every month. Once you use your secured credit card for a set period of time determined by your issuer, you may receive a full refund of your security deposit and be transitioned to an unsecured credit card.

Avoiding Your Card Altogether

The instinct to pretend your card doesn’t exist may come from a responsible place — i.e., you don’t want to find yourself buried under a mountain of debt. But the point of having a credit card is to build credit history — which you do by showing your ability to borrow and repay money. You won’t do a good job of that by letting your card collect dust. If it makes you more comfortable, consider the aforementioned secured card, or open a student credit card account that provides guidance for a new cardholder.

The Discover It® Student Chrome credit card, for example, helps members track spending and makes paying bills simple through the Discover Mobile App. Plus, there are incentives for using the card, like 2 percent cash back on purchases at gas stations and restaurants on up to $1,000 in combined purchases each quarter.* In order to maintain a balance between building a credit history and overusing your card, consider using your card for set purchases each month, like gas or groceries. That way, you’re still building credit while keeping your monthly bill manageable.

Opening Multiple Accounts

You might find multiple card offers enticing — especially when your favorite retailers offer a hefty discount just for signing up. But it’s important to stay strong in the face of a one-time 30-percent discount on some jeans! It’s usually best to stick with just one card when you’re starting out; that way you can more easily track your spending and develop smart cardholder habits. If you do decide to open another account, particularly with a retailer, be aware of the interest rates and plan to pay your balance if in full and on time, if possible.

Legal Disclaimer: This site is for educational purposes and is not a substitute for professional advice. The material on this site is not intended to provide legal, investment, or financial advice and does not indicate the availability of any Discover product or service. It does not guarantee that Discover offers or endorses a product or service. For specific advice about your unique circumstances, you may wish to consult a qualified professional.

Chrome Disclosure: You earn a full 2% Cashback Bonus® on your first $1000 in combined purchases at Gas Stations (stand-alone), and Restaurants each calendar quarter. Calendar quarters begin January 1, April 1, July 1, and October 1. Purchases at Gas Stations and Restaurants over the quarterly cap, and all other purchases, earn 1% cash back. Gas Station purchases include those made at merchants classified as places that sell automotive gasoline that can be bought at the pump or inside the station. Gas Stations affiliated with supermarkets, supercenters, and wholesale clubs may not be eligible. Restaurant purchases include those made at merchants classified as full-service restaurants, cafes, cafeterias, fast-food locations, and restaurant delivery services. Purchases must be made with merchants in the U.S. To qualify for 2%, the purchase transaction date must be before or on the last day of the offer or promotion. For online purchases, the transaction date from the merchant may be the date when the item ships. Rewards are added to your account within two billing periods. Even if a purchase appears to fit in a 2% category, the merchant may not have a merchant category code (MCC) in that category. Merchants and payment processors are assigned an MCC based on their typical products and services. Discover Card does not assign MCCs to merchants. Certain third-party payment accounts and digital wallet transactions may not earn 2% if the technology does not provide sufficient transaction details or a qualifying MCC. Learn more at Discover.com/digitalwalletsSee Cashback Bonus Program Terms and Conditions for more information about your rewards.