I am currently a college student and thought I would share to other college students how I personally built up my credit history from zero credit history to 700+ on all three credit bureaus.
Capital One Journey:
The first card I signed up for was the Capital One Student Journey, in my experience this is the easiest card to get with NO credit history (I’ve had several friends be approved with no credit history, but all of friends who have had negative history were denied). The rewards on the card aren’t great, and range from 1% – 1.25% cash back every month, which isn’t horrible either.
If you are approved for the card, congratulations! After using the card for at least 5 months (I recommend 6 months), go to the next step!
As a side note, after one year I was able to upgrade this card to the Capital One Quicksilver which has better rewards by talking to the live chat customer service.
Discover IT Student:
The next card I applied for is the card I use the most, the Discover IT Student. Discover IT Student generally will not approve you with no credit history, but from my experience and friends that have followed my foot steps they will approve you after having the Capital One Student card for 5-6 months. The great part about the Discover card is amazing customer support and great rotating rewards. This year the rewards were:
Q1: 5% Back Gas & Ground Transportation
Q2: 5% Back Restaurants & Movies
Q3: 5% Back Home Improvement & Amazon.com
Q4: 5% Back Sam’s Club, Amazon, & More
All of these are rewards a college student or anyone could benefit from yearly, and the rewards add up quickly as long as you pay your balance in full every month!
As a note the link I’ve included above is a referral link, you do not have to use this link but for the first ten people it will give a $ 50 cashback bonus.
Managing Your Cards:
Now that we’ve looked at what cards to get, it’s time to look into managing your new cards. The most important part of having a card is paying the minimum payment (ideally the statement balance) — you never want to miss a payment on your card. Your card will receive a Payment Due Date, one of my cards is due on the 16th of every month so I have to pay at least the minimum payment by 16th of every month…It’s important to note that you really should be paying the full balance. However, you only owe your previous statement balance on the card, if you had $ 100 charged on the card before the 16th and then after the 16th charged another $ 100 you wouldn’t owe the second $ 100 until your next statement balance.
One thing a lot of newer people to credit are confused about is the minimum payment…The minimum payment is essentially the least amount of money you can pay to not have a late payment put onto your account, however, you will still be charged interest. It is recommended you pay your card statement in full EVERY month and not run a balance. I will note though, credit lenders don’t see your credit utilization history except for your current credit utilization, so if you had maxed out your card the previous two cycles but it is now paid off they will just see 0% utilization. Please note if you miss a payment and do not pay the minimum it will stay on your credit record for years, so never miss the minimum payment.
Paying the Card:
You can pay for the card by mail but the best way to pay your credit card is to set your bank account up so the card will take a deposit out of your bank account. I have included great articles on paying your card below.
If you always have funds in your bank account and aren’t living paycheck to paycheck you can set up an automatic payment to come out of your account every month so you never have to worry about missing a payment, however, if you don’t always have money in your bank account this option may not be a good option for you.
Overall, managing a credit card is simple if you do not see it as “free money”. Use your credit card just as you would a debit card, and you will be fine. Ensure you do not miss a payment and you should be on the road to building a positive credit history!