I’m a college student, and I think it’s never too early to start establishing your credit. In fact, it is key to build a good credit history in preparation for the future when you are looking to take out a loan to finance a car or a home. Employers may check your credit rating to get a sense of what kind of person they are hiring, so a good rating could project a positive image and take you a long way.
As for college students who are constantly looking for an apartment to rent, landlords may favor you because it shows that you will be more likely to pay your rent on time.
Recently, we received a comment from reader Jeff on guest blogger Chelsea’s post about debit cards:
Our son is off to college this fall, and he’s never had a credit card. Would you suggest that we help him apply for a credit card in his name and a small ($500) credit limit, or should we give him our credit card to use?
This was a particularly timely question, as I’ve just taken off my own credit card training wheels.
See, for the last six months, I’ve had a joint credit card account with my mom to build my credit history. To avoid overspending and to prove to my mom that I was an accountable adult, we agreed that I would only use the credit card on big-ticket items since I already had a debit card for everyday purchases.
Another ground rule we set was that I would pay off the balance in full each month. This reassured her and gave me the opportunity to familiarize myself with the billing cycle and payment process.
Plus, I’ve learned a lot about credit and financial literacy while interning here at Wells Fargo this summer. That, combined with my mom’s guidance, gave me the confidence to take off my training wheels and fly solo. I did some research on which credit card was right for me, applied, and qualified on my own! Now I just need to make sure I continue applying what I’ve learned over the last six months to build my credit responsibly.
What do you think of this training wheels approach to getting your first credit card? Would it work for you?