5 Common Credit Card Mistakes Students Make in 2023 [ Avoid Them]

5 Common Credit Card Mistakes Students Make and How to Avoid Them in 2020

It’s a fact that when we are college students, we are probably more interested in having fun like a late-night party, road trip with friends – than thinking about our financial future. Even I had done the same thing when I was a college student. But it’s not always things will go like that; we also have to think about our future. Especially when we own a credit card, we need to be more serious about handling our cards. Having a credit card as a student is a good thing because it provides us both benefits and helps to build a good credit history from the beginning. But sadly most of the college students make lots of mistakes as a cardholder, which will hit them hard with negative consequences after graduation. So, here’s 5 common credit card mistakes students make and how to avoid them in 2021.

For now, those credit card mistakes seem like a minor thing, but there are head-scratching consequences that you have to handle in the future. Besides, when the consequences start to give you pain, and then only you will realize the importance of credit card handling. But don’t worry, you still have time to fix your mistakes. That’s why head through the whole article, know the common mistakes which you are making and start to solve them. 

But before you move to the main topic, let’s get a clear idea about the credit card if you are a first time user. In addition, also learn why students are at higher risk of owning a credit card.

What is a Credit Card?

A credit card is just like a tool that lets people borrow money from the credit card issuer or a bank to make a daily basis purchase. It also helps when it comes to transferring a balance and taking cash in advance. If you use the credit card money, then you have to pay it later, which you have spent; otherwise, you are only stacking your debt.

When you first apply for a credit card from the card issuer or a bank, first they will check your credit history. If your credit history is eligible for the new credit card, your application will get approved; otherwise, you can’t get a credit card. This is the first step that is used in each and every credit card company. Besides, if your application gets approved, then they will set a credit limit and interest rate based on your credit history.

When you have a credit limit, that’s the maximum amount you can spend on your credit card. If you reach the limit, then your credit card won’t work in any condition. After that, interest comes, which is set as an annual percentage rate, and you have to pay a monthly basic interest rate for using a card.

There’s also a trick to avoid paying the interest rate of your credit card. If you don’t want to pay your interest rate, then you have to pay the entire balance, which is shown in your statement by the due date. However, if you can’t pay the entire balance, then you have to pay a certain percentage of interest, which is left in your account. 

Why Are Students Higher at Risk For Using the Credit Card?

Are you wondering about that question?

That’s because first, they are the student who is studying to make their career. At that time, they have a minimum credit history because of low or no source of income. This means, most of the students can have a higher APR (Annual Percentage Rate) than the regular person. A study made in 2014, nearly 16% to 21% of APR, is likely to be used in the student credit card. 

That’s why credit cards can provide a cardholder both benefits and drawbacks if not used properly. 

Okay! For now, let’s move to our main topic that why most of the students make a mistake while using the credit card still in 2021. After that, later, we also talk about their solution to overcome those mistakes.

5 Common Credit Card Mistakes Students Make in 2021

If you are recently applying for a credit card or already own one, you must avoid these following things for your good credit card health.

Opening Too Many Credit Cards Account

You might get offered multiple cards for just a sign-up by your retailer. You might also think it’s only another card that I will sign-up for and leave it. But things will not go like that when you sign-up for a new card; it’s more likely to be yours. You have to take care of both your current and new card to maintain your credit history. 

Due to this, the CARD Act 2009, now don’t let the credit card companies to aggressively market the college student about the card. Despite the act, still, some of them offer students to get another new one. 

If you are just trying to learn about the managing process of credit cards, then you first have to start with only one card. Use it for a couple of years and learn how to build a greater credit history. When you completely get a habit of using the card while spending your money, making a transaction, paying the bill, and, more importantly, stay out of the pool of debt, then you can try for another card without any pressure. 

Besides, before applying for another card, be aware of interest rates and the benefits the credit card offers to its cardholder. Otherwise, you have to throw your new useless card in your wardrobe. 

Late Payment

Another main credit card mistake most college students make is by making a late payments. Well, you think you are maintaining your credit card, but in fact, you are more hurting your credit. 

As a college student, you might have a busy schedule, which is a common thing that happens at that time. But, you have to be extra aware of your credit card bill payment time. Take a little time for your bill payment because regularly late payment of credit card bills can make a serious impact on your credit history. Your late payment can stay in your credit card report for seven years. This will make lots of bad impacts when applying for a job, renting an apartment or car, and more.

Do you like that? Nobody ever wants to lower their credit, which they have been working so hard to build. 

Besides, a credit card issuer also charges a certain amount for your late payment. We are here to saving our money in one way, and another way our credit card company hits with extra charges fee. 

So to avoid late payment, pay your monthly bill before the due date. You can also pay the minimum amount of your credit card. It will somehow cover you from the late payment charges but it’s not a good habit. Why? Know the answer by clicking the following downlink.

More>> What Happens When You Make a Minimum Payment of Your Credit Card

Some of the credit card issuers also let your card link to your checking account and even set-up the alerts notification regarding the payment. So that you will be notified whenever your payment time is coming. 

Not Setting a Budget

Your budget is the most important thing which determines whether you are capable of making a purchase or not. If you are not tracking your financial budget then you will never know how much you have spent, and how much you have left in your card.

First, as being a student, we buy unnecessary things which we even don’t use. We always think that, we have a credit card, let’s go and buy random stuff. That kind of behavior leads you nowhere except the dessert of debt. You must know how much exactly you have spent in a month. And if you are spending more than the limit, then try to control your spending. The more you spend, the more you likely to hurt your credit scores, which are just immeasurable.

More>> 8 Smart Techniques to Build Good Credit 

Do you think that you can pay your debt in 30 days if you keep spending your money like a fired bullet? No, you can’t, so be a responsible cardholder and figure out how much you have to spent and how much you have left in your card if you want to build a good credit history. Also, choose the card which works for you the most.

There are also other ways where a student can track their finances.

  • Use the best tools to record your daily expenses so that you can calculate them later.
  • You can deposit your cash and checks into your bank account.
  • Check your bill notification alert and pay them as soon as possible.

Ignoring the Credit Card Debt

In college life, we usually don’t have that much money but still keep spending like flowing water. This kind of behavior slowly dragging us into the black hole of debt from where you can’t escape. If you have a credit card balance left in your card, make sure to pay it off before it’s too late.

Whenever you save a little bit amount of money, first try to pay as quickly as possible. If you still keep saying, “I will pay it later,” your debt will increase day by day. Besides, if you can’t have enough money to pay your debt, at least try to lower your spending. What this does is, it will somehow a little bit stop your debt from increasing.

Some of the students are a responsible cardholder and know how to manage their credit card. They know that credit scores will help them in the future after graduation. That’s why; these responsible students always look out for their balance and the position of debt.

Clearing your entire credit card debt is the best money management habit that helps you to make your financial budget healthy. So, we advise to all the college students to do a regular check of their credit card statement. Whenever you have money, first complete your debt like a responsible cardholder.

Carelessness About the Credit Card Security

Most of the time, students go from one dorm to another friend dorm to hang out. The open-door policy can make it a lot easier for a person who wants to slip your card. Who to blame if your credit card gets stolen because you trust all of your friends. But not all friends are honorable, so keep your credit card safe.

On the other hand, it’s not even cash; if it was cash, then it will be ok for you, but the credit card is like a debt that you borrow from the company. You might also have to face the charges, but it depends on the term of your credit card. If the issuer says to keep your card secure, then it all about your responsibility to keep it safe.

Though you can report about your stolen credit card to the issuer website but keep in mind federal law will limit your liability for unauthorized charges.

So this is also the most common credit card mistake many students make in their student career.


So, these above are the common credit card mistakes that most college students make. You can still use it in 2021 to avoid or cover these mistakes. Mistakes are meant to be taken, but if you continuously make mistakes, that’s your own fault.

Besides, if you are having difficulties in building your credit, first try to avoid the above-mentioned mistakes. After that, slowly you can make a good credit history. Patience is the key to become a success.

How’s your credit score? Throw your answer in the comment section down below.

Thanks for reading our article.

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