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How a Student Can Benefit from a Credit Card
Using a Credit Card as a Student
When I first started thinking about getting a credit card, all I could think of was everyone telling me how bad of an idea it is--too expensive, bad credit, impossible to get out of credit card debt, the usual suspects. As a 24 year old law student, I knew I didn't need any more debt that I was already accruing, but I really did want to build better credit. Here are the ways that I was able to make my Discover Credit Card work to my advantage.
1. Always Pay the Full Amount Due. I have not had one month that I have let interest build on my credit card. Credit card companies give out credit cards in hopes that they're going to make money off of you. Don't let them! Pay the full amount each month, and you'll end up saving an immense amount on the interest the company is hoping to make from you.
2. Only Use it for What You Would Buy Anyway. I only use my credit card for things I need or want to buy anyway, even if I did not have the card. If my budget would not allow for the purchase sans the credit card, I don't buy it!.By doing this, it actually allows me to follow through on #1, because I've already allocated the actual money in my account to that type of expense, so when the bill comes, it's only a matter of paying what I would have paid for anyway.
3. Pick a Card With Rewards. I chose the Discover card because of the great rewards it offered. I receive 1% cash back on ANYTHING I purchase. 1% does not sound like a lot, I KNOW. But it adds up! And when you're buying things you already would anyway, why not make a little extra cash?
But the rewards with Discover get better! Each quarter there are categories that earn 5% cash back. Half of the year, this includes Amazon, which is PERFECT for me as a student, since I rent and buy my books through Amazon. I pay attention to what the categories are, and if, for example, one quarter it is restaurants, and I go out to dinner and spend $50, I will receive 5% of that back!
Discover has an even MORE amazing promotion with their cards too. They double the first year of your cash back, at the end of the year. I'm about to finish my first year, and I have made just about $90 in cash back. That means, that at the end of this month, Discover is going to credit me with ANOTHER $90. It can be used for giftcards, towards Amazon purchases, or my favorite, a direct deposit into your bank account.
If Discover's benefits sound like something right up your alley, use my referral link, and after your first purchase, you'll receive a $50 cash back bonus credited to your account!
I have been able to use my cash back for textbooks, groceries, and when I get the big "end of my first year" bonus, I plan to put it toward my post-grad savings account!
4. Build Your Credit. Because I pay my bill on time and in full every month, my credit has been positively affected. I can check my credit score through my bill every month and I can see how it has gone up, and the things that have made it as great as it is (length of account opened, on time payments, lack of debt, etc.)
Everyone scares students into thinking that credit cards are the worst thing we could do for our finances, but if you are smart about it (like I like to think I am), you can actually benefit more from the credit card than the credit card benefits from you. Obviously my knowledge is limited to my Discover card, and I know there are many other great options that offer similar benefits, but if Discover is something that sounds like it may interest you, and you want an extra $50, use my link above to apply!