college student and credit cards

Hi Jennifer. I'll chime in here since this is a credit/credit score question. From a scoring perspective the number of credit cards you have is a distant second to HOW you choose to manage those cards. You can have 50 and as long as you pay them on time, keep the balances near or below 10% of your limits then your credit scores will be fine.

The best credit scoring strategy is to have enough cards that you can function effectively in our cashless world.

Personally, I have 5 credit cards with a combined $94K in credit limits. This allows me to charge up to $9,400 in any given month without going over 10% utilization. These are mostly business expenses and I pay them all in full each month.

By earning this kind of collection I've insured myself against spikes over 10% and this helps to protect my credit scores.

I'd suggest you work toward the same goal and keep them limited to Visa's and MasterCards. You can use them anywhere...even at Vickie's Secret. ;)

Hi Jennifer,

There are several valid reasons one might have for opening or retaining credit, and thus your questions can be answered several different ways. John is right on with respect to the credit scoring angle.

Another reason is to build a versatile and rewarding credit portfolio. This means different types of cards (Visa/MC, American Express, Discover, store cards) and different issuing agents (Citibank, Chase, credit unions) all offering good incentives for using their card (broad acceptance, attractive rewards, and low rates and fees).

Based on this standard, you're off to a great start. The Amex Blue Cash card and mtvU cards have excellent rewards programs, come from major issuers, and are widely accepted payment methods. And while you wouldn't want many store cards, up to a few can be worthwhile if you use them frequently.

If I were in your position, going forward I would not hesitate to open up to a couple of new cards per year that fit my needs well. Since Amex Blue Cash is already a "prime" card (and mtvU a prime student card), and your payment history is perfect, the only factor preventing you from getting most any card you wanted would be your household income figure. But that will change once you enter the full time work force.

Bottom line: you're off to a great start. Keep up the good habits, and don't hesitate to slowly build on your already strong credit credit base.

thanks dave. are there any specific cards that you'd suggest?

Hi Jennifer,

If I were in your position, I'd probably open a Chase Freedom card and a Pentagon Federal Credit Union Cashback Visa. I'll be working on detailed reviews of these products (FiLife already has mentions of both of them), and will "bump" this thread with an update once they are available.

the first Guru that commented, should be shot. it is not a good idea to have 50 credit cards. it makes getting loans for other more important things much more difficult in the future because having that many trade accounts (especially revolving lines of credit) open will damage your credit score. at the same time, having a balance greater than 50% of your limit will also destroy your credit score so his advice of keeping them below 10% is actually a good one. a student without a full time job probably doesnt need more than 5. that number is probably too high, but if you can pay them each month and keep the balances down on them you should be ok. this is how credit card companies make money. they kill the college student who has no discipline and doesnt watch their spending habits. this will set you up for a lifetime of disappointment because unfortunately, your credit score is probably the most important thing you will ever have.

jherzig19,

John was right above. (And frankly, as a bona fide expert on credit scores, he is extremely well qualified to comment on this point). Simply having many credit card accounts on your file will not significantly hurt your score. (I actually do have around 50, so I can vouch for this personally). What WILL hurt your score is APPLYING for many new cards within a relatively short time frame. But picking up 2-4 cards a year for 10-15 years can be done without significantly dropping your score. Indeed, by increasing your available credit, it can reduce your credit "utilization", and as a result actually increase your score on the whole.

You are certainly right on concerning the importance of discipline, however. If having five or fifty cards makes it easier for you to spend money on things you don't need and/or wouldn't otherwise buy, that's reason enough not to get them.