Obtaining and maintaining solid credit has always been an important part of living in this country. Ever since banks became an established part of our financial system, we have relied on credit to buy the things we need that we cannot afford in cash today. This concept is even truer in today’s America. Unfortunately, college students can sometimes have a tough time starting their journey with credit. I know from personal experience many college students who have no credit cards or any other type of credit vehicle (loans, mortgages, etc.). Nevertheless, it is important to stress the crucial nature of credit in our society today and to remind young people that credit can be a very powerful tool if used correctly. As millennials, our perceptions may be skewed by the 2008 financial crisis, which saw rampant unemployment and inflated housing prices. However, it is important to remember that in spite of the struggles from that period, credit is still very important and can be a very effective tool for anyone who is financially literate.
One of the best options for college students looking to obtain credit is to look into secured credit cards. A secured credit card is a card where you put a security deposit down to act as protection against a missed payment. If you miss a payment, the card issuer can take your deposit. While I do not have a secured credit card myself, I have heard from others that they are great ways to build credit, especially if you are trying to start up your credit history on a positive note. This is probably your best bet to start building credit. Once you establish good credit for at least 6 months, try applying for a normal credit card. The cards with rewards are harder to obtain, so perhaps try for a standard card like the Journey Card from CapitalOne. Many card issuers also have cards tailored to students as well, which could be of good use to us students.
As you can see, there are several ways to help build your credit while still attending school. It really is a great idea to build a good credit history before you start a full-time job after graduation. It’s easier than you think!