Skip Navigation
After navigation

Credit Card FAQs

First, check your credit report and credit score. Go to to get a free copy of your credit report (federal law requires the nationwide consumer credit reporting agencies – Equifax, Experian, TransUnion – to provide you with a free credit report every 12 months). When reviewing your credit report(s), you want to make sure you know what is included—although a credit report from each agency will be similar, there may be differences reported. You don’t want surprises (or errors) to get in the way of getting approved for a credit card. Know your buying power. But beware: you will not get your actual credit score without paying a fee. As an alternative, you can go to one of the credit reporting agencies (TransUnion, Equifax, Experian) to request a report directly from the source.

Next, decide the type of card you want to apply for. The better your credit score, the greater your options. Your main choices will be 1) a secured card, 2) an in-store card (think department store), 3) a traditional credit card with annual fees, or 4) a card without annual fees.

Third step… start shopping. Go online (or better yet, stay on this site and look at our partners) to see the types of credit card offers available. Read the descriptions to get a feel for the terms, fees, and annual percentage rate (APR), plus any introductory zero interest offers and other benefits. Apply by clicking on the credit card company you like and completing an online application.

Most companies also provide toll-free numbers where they can walk you through the qualifying process over the phone. Or, you can even submit an application via the mail.

After applying, the credit card company will let you know if you are approved and what your credit limit will be. The credit information they used to make their decision will be shared with you, either by email or sent in the mail.

Our picks for the best student credit cards are here on our website. We present some of the most competitive offers in the market and give you the info you need to help make a decision based on features and benefits. The beauty of student credit cards is lenders understand you may not have a lengthy credit profile. They also know you may not have much of a disposable income. Student credit cards are designed to be a starting point to help build credit. Therefore, your credit limit may low initially.

Indeed there are. A number of companies are willing to help you start building your credit through the use of a student credit card, even if you have no proven track record or robust credit score to date. You have several decades of earning (and spending) potential ahead, and companies know that. Some of the best offers could be a secured card (where a deposit of a couple hundred dollars is required), or an unsecured card which may require a demonstrated ability to pay a small bill each month (in some cases as low as $10 or $20 per month). With an unsecured card you may be encouraged to apply with a cosigner.

Some offers come with an annual fee—usually between $35 and $50—and others will offer zero annual fees. We did a lot of legwork to provide a competitive list of student credit cards worth checking out. Review the features and benefits we outlined and Apply Today for the option that best suits you.

The short answer is nope. At least, you shouldn’t. Student loans are intended to cover educational related expenses. You know…tuition, fees, textbooks, housing. You probably already know how this works, but student loan proceeds are sent to the school which will apply the funds to your account to pay for tuition, fees, campus housing, etc. If there are any proceeds remaining, your school will issue those to you (or the borrower), usually in the form of a check. This is where it gets tricky for a lot of students, and where this question comes into play. A number of students think they can spend their check on their credit card bill. If you were in a situation where you needed to charge education related expenses before your loan funds arrived (think textbooks, for example), you could certainly justify the use of your student loan for that type of reimbursement. But credit cards are not intended for education-related charges, student loans should not be used to pay for them. We suggest you look into a part-time job, or federal work study. When in doubt about managing your student loan proceeds, we recommend consulting with your financial aid office.

If you are looking to repay your federal student loans with a credit card, the answer is simple, no. Federal student loan services will not accept credit card payments for federal student loans. If you are a private student loan borrower, your lender may allow you to pay your student loan with a credit card. There may be fees or limitations on how many times you can pay your student loan with a credit card. There are also intermediary services which will allow you to use credit in places where you typically can’t use credit—however there could be costly fees associated with that type of service.

Here’s the thing, even if you can find a way to do it, paying your student loan with a credit card is typically not advised because it can be expensive! Unless you plan to pay your balance in full, a credit card will likely have a higher interest rate than your student loan. Or if you need to use a service to help you pay your student loan with a credit card, you will be charged a fee upfront. Another reason? Well, credit cards don’t offer borrower benefits like, flexible repayment option, the ability to postpone during periods of financial hardship, and loan cancellation for total and permanent disability and death.

The app ChangEd will allow you to link a credit card with a bank account to help you repay your student loans faster. ChangEd is a round up app—which basically means it rounds up all your purchase to the dollar. That spare change is then used to help pay off your student loan quicker! Now, ChangEd won’t let you only link a credit card, it will also require you to link a bank account. It won’t round up charges made on your credit card, it will actually round up the spare change from your linked bank account (the last thing they want to do is add to your debt!).

In a nutshell, credit cards allow you to charge purchases so you don’t have to spend cash up front. In exchange for that convenience, the credit card issuer charges interest when you repay what you’ve charged on the card, if you don’t pay the balance in full as dictated by the billing statement. More on billing in a moment.

Credit cards come with a spending cap (called a credit limit) which will vary by person. Your credit limit depends in large part on your credit score, credit history, and income level, plus your debt-to-income ratio which is an indication of your ability to repay.

When you apply for a credit card, the lender will determine your credit limit and offer you a card for that pre-determined amount. They will also present the APR (annual percentage rate) that you will be charged. Every time you use your card, you can technically spend up to the credit limit. And you will be given roughly one month (the average duration of a billing cycle) to pay the lender for the charges incurred. If you pay the balance IN FULL each billing cycle, you can avoid interest charges. But if that’s not possible, and let’s face it, that may not always be the case, then you will be charged interest according to the APR you agreed to in the credit card terms.

The billing cycle will also vary from person to person. The cycle can start on any day of the month. It could be the 1st of the month or the 10th or 23rd. You get the idea. It depends on when the card was issued and when activity is initiated on the card. Your credit card statement will include an Opening/Closing Date which is the activity period for that billing cycle. Any transactions or charges you made during this period will be reflected on your statement. Payment is due 27 days after the Closing Date. If you have questions about the billing cycle, interest charges, calculating payments, etc. we strongly encourage you to talk to your lender. It’s also a great way to learn based on your specifics as you start using the card.

The final thing to understand is the difference between purchases and cash advances. Purchases, as the name implies, refers to items you bought at a retailer, or charges you made online including paying bills. On the other hand, cash advances refer to essentially using your credit card like an ATM card to access cash. But be careful. Using your credit card as a debit card means much higher rates; often as much as 10 percentage points higher than the APR you would normally pay for purchases. This has tripped up a lot of people in the past, as there is often an assumption that the APR is the same, regardless of how you use the card. Your credit card issuer is required to outline the difference in terms, so be sure to read the fine print on your credit card offer and your billing statement.

This is an important concept to nail down. The APR, or annual percentage rate, is the cost of credit conveyed as an annual rate. But what you really need to understand is the daily periodic rate. Most credit card companies use a method called Daily Balance which means interest is compounded daily. See the steps below to calculate this.

  1. Dive the APR by # of days in the year (365)
  2. Example: If your APR is 14.5% you would divide that rate by 365 (14.5% / 365 = 0.0397). And you’ll need to divide by 100 to get the correct percentage of .04%.
  3. The last step is to look at your average daily balance you’ve carried on your card. Multiply the average daily balance by the daily rate and then multiply by the number of days in the billing cycle. For this example, we will assume 25 days are in the billing cycle. So let’s break it down even further:

    If your average daily balance is $500, you’d multiply that by 0.04% and multiply by 25 days in the billing cycle (500 * 0.04% * 25 = $5)

Not so fast. We’ve written a more comprehensive article on this topic, but we will answer this question with 4 main things to consider.

  1. If your school participates in the federal student aid program , you can qualify for loans at a much lower interest rate than the APRs associated with credit cards.
  2. Most schools charge a fee to use a credit card, which adds to the cost of tuition you’ll pay.
  3. Unless you’re sure you can pay the balance in full when the bill comes, you’re better off leveraging student loans which have no prepayment penalty.
  4. If you’re in a strong cash position and you want use your credit card to qualify for bonus points, or airline miles, or an introductory 0% credit card offer (and again, you plan to pay the card in full anyway), then it may make sense.

Just make sure the rewards outweigh the risk.

Student credit cards are a great way to start building credit and can even provide help in the event of an emergency. It’s not that they provide far better terms than traditional cards, but they are tailored for individuals without a long track record of handling credit. So it can be more advantageous to obtain one because it may (arguably) be easier to qualify. And a lot of lenders provide perks that are unique to students. Here are some other things to consider:

Student Credit Card  Traditional Credit Card
Lower credit limit Credit limit could be high; based on income and credit history
 Unsecured (typically) May be secured or unsecured
May include one-time pardon for late payment Most credit card issuers charge a late fee
Benefits based on academic achievement may be available Benefits are not typically student oriented
Cash back and other perks may be included Cash back and other perks (like travel awards) may be included

Here’s the honest answer. It depends. What are your goals with having more than one? Some people carry 2-3 cards because the diversity makes sense. For example, they may have a traditional credit card along with retail store cards (think department store) in order to take advantage of discounts that may only be offered when using one card vs. another. Similarly, some credit cards are more generous with travel perks or cash back awards, and you may end up getting another card to take advantage of those programs while keeping your first card open.

By the way, that is a helpful strategy in building and preserving a strong credit score since length of credit history accounts for about 15% of your overall score.

So, back to our answer. If you’re a savvy shopper and want to take advantage of introductory 0% interest rate offers, or tap into perks that your current card doesn’t offer, we say go for it. As long as you can manage multiple cards and afford to pay off the balances, it could be advantageous. But there is always a delicate dance between the number of open lines on your credit report, and the amount of available credit. Both can be detrimental to your score if over utilized. So if you are going to opt for multiple cards, keep your credit limits low, as appropriate, and ensure you have the income to cover it all.

Pros: There are plenty of reasons to consider transferring your balance from one credit card to another. Here are some top considerations:

  • Zero percent interest for a fixed period of time. This could be 6 months or even longer in some cases.
  • Better perks, including discounts, cash back and rewards. Maybe your current card(s) lack some incentives you could get elsewhere.
  • Consolidation. If you’re just tired of dealing with multiple accounts, it may be advantageous to transfer your balances to one credit card and deal with one company versus several.

Cons: Transferring your credit card balance may have some disadvantages. Here’s what you should know:

  • Beware of fees! Some credit card companies may charge a fee to transfer your balance, and may even impose an annual fee just for having the card.
  • Your APR (interest rate) could be higher than your current card. Don’t be fooled by the introductory rate that may be advertised. Pay attention to the rate that goes into effect for the long-term and what happens to your outstanding balance for a transfer made with an introductory rate if it is not paid within the allotted time..
  • There could be a ding on your credit score. Hard inquiries impact your score, even if it’s a reasonably low number of points. Depending on your current score, that may impact you more than you know. Every application and credit decision could count against you even if you get approved.

Simply put, a cash credit line is the amount of money made available for cash back (think ATM or grocery store transactions where you can request money back). Credit card companies will reserve a portion of your available credit limit to be used as a cash credit line (sometimes referred to as a cash access line) because they understand you may be in a pinch and need to leverage your card more like a debit card. But beware: the fees and interest rates associated for using your card like a debit card are higher than the rates you pay on other purchases. Read the fine print.

In a nutshell, a secured credit card requires a cash deposit in order to reduce risks to the credit card company. This is a great option for individuals trying to repair poor credit, or for those still building their credit. The amount of your deposit is usually also the amount of your credit limit (i.e. if you deposit $250 your spending limit will be $250). In the event you don’t pay your bill, the credit card company will simply take the money from your deposit. But if you pay responsibly and build a positive track record, you could quickly qualify for an unsecured card (one that does not require a deposit).

You can use a secured card wherever credit cards are accepted, including online, but remember that if you carry a balance interest charges will apply. Some secured cards come with zero annual fees but most will charge an annual fee.