My son just started his junior year of college, he has his own bank account, debit card and a slew of companies trying to sell him a credit card.

Just the other day, I picked up the mail and I noticed he received an application for a credit card from Discover. He applied and to my pleasant surprise, he got approved for a card with a $500 credit limit. 

With the new credit card rules in effect since February 2010, as part of the CARD Act, it is difficult to get a credit card if you are under 21. For that reason, I was happy he was able to get a credit card to start establishing his credit history.  

However, I was worried he would overspend or forget a payment. Here are five things every college students should know about credit cards.

1. Know your Checking and Savings Account Balance. College students rarely have a steady stream of funds coming in, making it critical to track money coming in and out of the account.  Most students have low day-to-day expenditures, mainly food and transportation; however, the majority of a college students’ budget is subject to larger fluctuations. From big influxes, like a monthly allowance or a work check, to even bigger subtractions, like rent payment, or tuition fees, your bank account is always in flux. If you know how much money you have in your account at any given time, you get a better idea of what you can charge to your credit card without going over budget. 

2. Use your Credit Card. Just swipe responsibly. As a student, having a credit card may seem superfluous, because most students can manage their finances with just a debit card. A credit card allows young adults to build their credit history, and if the credit card is used wisely, “good credit” will pay big dividends in the future. A good credit score allows you to finance big-ticket items like a car, or house at good rates down the road. 

3. Know your Credit Card Balance. Just as important as knowing your account balance, it is critical to understand how much you have charged on your card. If you lose track of your spending and charge more than your bank balance can support, it can lead to revolving debt, which can grow very quickly with high interest rates. 

4. Manage your Account Online. It is very easy to lose track of your credit card expenses when you only receive monthly paper statements. Go paperless. By managing your finances online, you get real-time updates detailing your expenditures and your bank account balance. Online banking simplifies the process of owning and managing a credit card, and will keep you more financially aware and responsible. 

5. Know When Payments are Due and Pay in Full. It’s no secret college students procrastinate-don’t. If you pay off your credit card balances on time in full, you will never have any credit card debt problems. Period. If you don’t your credit score will take a hit, and you may find yourself in a financial hole that is very hard to dig out of. 


Murali Subbarao, founder is the founder and CEO of Billeo, Inc. ( Billeo provides a suite of free Online Assistants that save people time and money in all types of online transactions, from shopping to bill pay. To do this, Billeo works with more than 1,500 merchants and 40 banks, and top credit cards, including Visa and American Express. In 2010, Billeo was named “The Best Free Software” by PC Magazine. Subbarao has worked in high-tech and financial services for more than 16 years, most recently developing Internet Banking and Payment solutions with Hewlett-Packard.