Top 10 Credit Card Mistakes to Avoid as a Student

Last Updated on

Written by SnappyRates Team

Snappy Rates is reader-supported. This means if you click on some of our links, we may earn a commission. This does not affect the objectivity of our evaluations. Read our disclosure.

Do you ever wonder about the advantages of using a credit card? Why use a credit card when you have a debit card? You may even find yourself thinking about credit cards and debt synonymously.

While there certainly are mistakes that can be made through credit card use, there are also huge benefits to knowing how to properly utilize credit cards.

One of the greatest benefits of using a credit card is an increased level of security. Ultimately, a credit card is safer to carry than a large amount of cash and offers increased fraud protection over a debit card.

Depending on the credit card you choose, there are also varying cash back, travel, or reward points you can use toward a purchase or experience.

Another advantage of using a credit card is building credit, which can make you more desirable when you apply for a loan, such as a car or a property loan. Nevertheless, you’re likely still wondering how you can avoid making common credit card mistakes.

In this guide, we’ll cover the top 10 mistakes that new credit card holders, like students, often make.

Top Student Credit Card Mistakes to Avoid

Let’s start by saying that credit cards can feel overwhelming at any age but especially when you’re also navigating early adulthood and university. Many people are first exposed to credit cards through the opportunity to open a student credit card.

Often, these cards are easy to acquire. While easy acquisition benefits students, it can lead to harmful credit card mistakes if you don’t understand how to use your card properly.

That’s why it’s especially important to understand how to navigate the common mistakes when accessing these cards.

#1: Paying Late

If you have a debit card, it works similarly to cash. You swipe your debit card to pay for an item, and the cost comes directly from your checking account.

With a credit card, you have a limit on the balance you can carry, meaning you have to pay that balance with money in a savings or checking account after the fact.

It is vital to pay off your balance by its due date to avoid incurring late fees for carrying it over, thus risking a hit on your overall credit score. Plus, if you don’t pay off your balance on time, you’ll start to accrue interest.

In other words, if you used your card to buy $200 airline tickets, you may pay $220 for those tickets if you don’t pay them off promptly.

Using your credit card can be a way to pay off large purchases incrementally, but you will end up paying more than the initial value of your purchase when you consider the interest.

#2: Only Paying the Minimum Balance

If you do not have the funds in your checking or savings account to pay off the entire balance left on your credit card at its due date, you can also pay the minimum balance to avoid paying any late fees and minimize the interest.

That’s a risky move, though, because you will still be accruing interest, and it may take you a long time to fully pay off the balance.

#3: Not Checking Your Statements

Be sure to check your credit card statements every month. This helps ensure that you know how much you owe, but it also helps check for fraud. If you do not check your monthly statements and just pay your balance, you may miss suspicious purchases and fraudulent charges made to your account.

Related: Here are the practical ways to avoid credit card fraud.

#4: Carrying a High Balance

Your credit utilization ratio consists of the amounts owed across all of your credit cards. It’s good to keep your credit utilization ratio at or below 30%. If you get closer to maxing out your credit limit, you risk lowering your credit score.

So if you have a credit limit of $1,000, you’ll probably want to keep your credit card’s balance at about $300.

#5: Using the Wrong Type of Credit Card

Students can access many attractive credit card deals, so make sure you pick the right card. Here are a few must-have features of a student credit card:

  • No annual fee: You’re a student on a budget, but you’ll also be able to keep this credit card on hand in the future when you may have fee-charging credit cards.
  • Reporting to all three credit bureaus: You’re opening this credit card to build your credit, and you want to make sure that it gets tracked.
  • No foreign transaction fees: Do you plan to study abroad? Even if not, it’s good to have a credit card on hand that won’t charge you when you travel internationally!
image showing a lady student committed a credit card mistakes

#6: Applying for Multiple Credit Cards at Once

Every time you apply for a new credit card, it increases your credit limit. Drastically increasing your credit limit in a short period of time can, in turn, drastically drop your credit score.

It’s good to keep your amount of credit cards as small as possible, but a good standard to follow is to not open more than five credit cards in two years.

Learn how many credit cards you should have.

#7: Making Unnecessary Purchases on Your Credit Card

While having a credit card and building your credit is good, going into debt is not. Avoid making purchases on your credit card when you don’t have the money in a savings or checking account to back them up. In doing this, you’ll also avoid interest rates and a ding to your credit score.

#8: Not Requesting a Credit Limit Increase

Think back to what we discussed in tip #4: Carrying a High Balance – do you find that you’re carrying a credit utilization ratio above 30% but comfortably paying it off? If so, asking for a credit limit increase can ultimately increase your credit score, getting you closer to a ratio at or below 30%.

#9: Not Getting a Credit Card

Even though a credit card and a debit card might feel and look the same, a credit card can offer perks and protections that far outweigh a debit card.

Starting to build your credit now will also have major payoffs in the future. Even if it seems daunting, it’s important to start building your credit score as early as possible. Set limits for yourself to keep spending in check.

#10: Not Reading the Fine Print

Make sure you fully research the credit card and its benefits before going forward with your application. You don’t want to incur surprise fees or lose out on benefits you thought were guaranteed because of hidden fine print.


What five things affect your credit?

Five things that can affect your credit are payment history, amounts owed, credit history length, credit mix, and new credit. By ensuring you stay on top of all these features, you can set yourself up for better credit.

What are three ways you can hurt your credit score?

Three ways you can hurt your credit score include opening many lines of credit in a short period of time, holding a high credit utilization ratio, and making late payments. Staying away from these activities can help your credit score grow over time.

What are three things that will raise your credit score?

Three things that will raise your credit score are paying bills on time, reviewing your credit regularly, and making payments on past-due accounts. If you want to boost your credit score, try taking on one of these activities.

Is making multiple payments on credit cards bad?

Making multiple payments on credit cards is not a bad thing – quite the opposite. Making multiple payments on a credit card throughout the month or whenever you are able chips away at your balance and debt and can, in turn, increase your credit score.

Bonuses & Deals for July

Free prepaid card with up to 5% cashback. No credit check & $20 bonus when you deposit $50 and complete first purchase.

Unlimited transactions with free chequing account and $400 welcome bonus!

No current offers for this category.

Subscribe to our Newsletter!

Subscribe to get the latest personal finance news, offers, and our weekly newsletter. You can unsubscribe at any time.

Gravatar for SnappyRates Team

SnappyRates Team

The SnappyRates Team comprises personal finance writers who have reviewed and personally tested hundreds of financial products in the Canadian space. With over 20 years of combined experience to draw from and expertise in all things credit cards, banking, insurance, and mortgages, our goal is to provide you with the most comprehensive guides and resources to help you on your financial journey.

Leave a comment

Hello there
  • Earn 5.90% interest rate* on every dollar.
  • One of the best savings rates in Canada.
  • Access to free unlimited chequing account with $400 bonus.
*Terms and conditions apply. Limited time offer.
  • Earn 6.00% interest rate* on every dollar.
  • One of the best savings rates in Canada.
  • Access to free unlimited chequing account with $400 bonus.
*Terms and conditions apply. Limited time offer.