Credit Cards for Students and Younger Borrowers

By Richard Cox
Richard Cox
Richard Cox
July 17, 2014 Updated: April 23, 2016

For students and younger borrowers, choosing a credit card can seem like a daunting task. According to studies from the Washington State Department of Financial Institutions (DFI), most borrowers in this category will choose a credit card based on advertised incentives and little else. But this type of behavior can lead to negative outcomes that can put younger borrowers on a path to record an unfavorable credit history, right from the beginning. 

For these reasons, college students and new borrowers must learn to look past the advertised offers and focus instead on the details that will define the terms actually seen during the cardholding period. This might seem difficult to those with limited lending experience — but this is critical if you expect to start building a strong credit history. Luckily, there are many reputable resources available that are designed to help new lenders understand the terms of your credit cards and to select the lending companies that are best suited to meet your needs. Resources like can be used to research the various options available, and even to learn strategies in re-building your credit score after experiencing financial troubles in the past.

Learn to Look Past the Initial Offers

The unfortunate reality is that the benefits seen in most credit card offers expire after a set period of time. Once this expiration occurs, the borrower might then be forced to accept an entirely new set of terms that are much less favorable. One classic example is the 0% interest rate credit card. Typically, these incentives (which do offer great value) will last for six months, and then revert to a much higher interest rate once the initial benefits expire. In many cases, this changing interest rate will be higher than what is offered by other credit card companies.

For those holding a rolling balance, this can completely erase any savings that were seen during the introductory period of 0% interest rates. So, while the initial offer would catch anyone’s attention and can be used to avoid extra interest fees for those unable to pay off their credit card balances each month, it must be remembered that all of these benefits can be removed after a certain period of time. According to , borrowers in the 18 to 24 age bracket spend nearly one-third of their income on debt payments. This is largely because of the added debt costs that are associated with the cost of college tuition. But it should be understood that this figure has nearly doubled since 1992, and this trend shows no signs of reversing any time soon.

Debt Difficulties for Students

College costs can make up one of the most significant investments in a person’s life, and if our debt obligations are not managed properly, it quickly becomes easy to fall into a downward debt spiral that can last a lifetime. College students are often forced to pay a larger portion of their income to repay these debts than any other age demographic. This is unfortunate because this is also the time in our lives when we have the least experience in managing these repayment obligations. All of this means that it is important during these times — now more than ever — to truly understand what you are getting into when you sign off on a new credit card agreement. One of the easiest mistakes is to assume that all credit cards are “relatively similar,” and that any differences in the exact terms will be negligible.

Unfortunately, this is not even close to being the reality as some credit card companies are much more reputable that others. For those that do not hold a revolving balance, the potentially negative effects can be limited as there will be fewer obligations for you to meet. But since this characteristic does not match up with the majority of borrowers in this age group, additional research needs to be conducted before any agreements are signed or any real money is spent. For these reasons, all available resources should be utilized. Websites like allow borrowers to compare credit cards based on a large number of benefits and demographic categories. Not all websites have access to information that is essential for college students, so it is important to make sure that the information you are reading is relevant for your individual situation. Ultimately, it is important to remember that choosing the right credit card is not as complicated as it seems — as long as some necessary research is done early on.