Can I get a credit card, as a PhD student; and if so, which one?
September 4, 2014 8:54 AM   Subscribe

I'm in the latter stages of my PhD, and I have been recently realizing that I have literally zero credit history. I don't need a good credit history now, but I anticipate needing one later. Presumably, in order to do this I need to get a credit card. Help?

I'm very frugal with money and I don't like the idea of buying things on credit, but I am prepared to do this if this is what it takes to get a credit history, which apparently now functions as one's financial calling card in society. My questions are two-fold. First of all, who (if anyone) will give a PhD student a credit card? The situation is complicated by the fact that my stipend has just ended, so I have zero income (although I do have some savings, and my parents might be willing to co-sign). I imagine this may well rule me out in terms of being approved for a credit card in the first place. Second: if I do manage to get a credit card, how can I maximize building a good credit history within as short a time-frame as possible? I know I need to pay everything off every month, but should I spend up to my limit, or should I spend less? Any tips?
posted by ClaireBear to Work & Money (15 answers total) 3 users marked this as a favorite
The major banks often have promotions where they'll give you $100 or $200 for signing up with their credit card, but you might need to sign up for a free checking account and seed it with some money. I'm sure somebody will issue you a credit card; just try others if you get rejected at first.

Credit cards aren't evil if you pay them off every month. They're much safer to use in daily transactions than debit cards because of the fraud protection.
posted by qxntpqbbbqxl at 9:02 AM on September 4, 2014 [2 favorites]

1. The easiest best place to get your first credit card is through the bank you already bank with. Call them and ask what your options are. (If you are given options for a type of card the rewards choices can be overwhelming--an easy choice is something with a very simple % cash back plan, no miles or points to keep track of.)

2a. Don't try to game your credit card usage. Just use your credit card for everything you normally would, as if it is a debit card or cash, and then pay it off in full. Don't think too much about it. Credit problems only arise when you start thinking of your credit card as magical future money--don't do that. Just stick to the budget you already have, don't spend more than afford, and go from there. Basically: treat the credit card as a bit of plastic to make your life easier, not to make your life more complicated.

2b. What is your living situation like? Putting all of your household utility bills in your name (and, obviously, paying them on time every month) is an easy, passive way to establish a credit history.

2c. This is obviously way off for you, but every year I like to call my various credit card companies and ask them to increase my credit limit, since part of your credit score takes your % of credit utilization into account. Not something you should be thinking about at this stage, but just something to consider doing as you go forward to help you get that credit ball rolling.
posted by phunniemee at 9:04 AM on September 4, 2014 [3 favorites]

Student credit cards are what you're looking for; start there.

Just use it like a debit card: set it up for automatic payment from your bank account every month and don't worry about it any further. Keeping "utilization" (your balance as proportion of your credit limit) low but not too low matters a little bit to the credit raters, but many other things matter more; use it regularly and pay it off regularly, don't make a habit of maxing it out, and beyond that it doesn't really matter much what you do. There's a limit how much you can do to build a credit history in a short time, because the age of your accounts (and other correlated factors like the size of your credit limits, which usually go up over time) matters to the credit score too.

(For many people in this situation student loans have already established all the credit history they need, but I guess that's not the case for you.)
posted by RogerB at 9:05 AM on September 4, 2014

Credit cards are in some ways superior to debit cards--like qxntpqbbbqxl says, they are safer. My credit union offers a "secured" credit card for people with no credit history; what that basically means is you must have the entire amount of the credit limit available in your bank account, so they know there's no way you'll have trouble paying the card, and it lets you build credit. If you are a member of a credit union or can join one, this might be a good first step (a lot of credit unions actually have lax membership requirements so joining might not be as hard as you think). I am not sure if this is a service that banks typically offer as well.

My first credit card was the Visa Rewards card because I shop at Amazon so much (I know, I know). They started me off with a very low credit limit. I like this card because I get points for all my purchases which I can use to pay off the balance of the card (so basically, free stuff).

Definitely just set up auto-pay for whatever card you end up getting so you never have to worry about late payments and interest charges.

Also, don't spend up to your limit. The general rule is try to never keep a balance more than 30% of the credit limit of the card.
posted by Librarypt at 9:11 AM on September 4, 2014

Sign up for They will give you an estimate of your credit score (which you can update whenever you want), and they will serve you offers for credit cards that you are likely to be approved for. I think Mint might do this now too. They're both free and very handy.
posted by mskyle at 9:13 AM on September 4, 2014 [1 favorite]

You will probably have to get a secured credit card. Beyond a certain age, it becomes simply impossible to get an unsecured credit card if you have no credit.
posted by enn at 9:16 AM on September 4, 2014 [2 favorites]

Do you already have a bank account? You might be eligible at your current bank to apply for a credit card.

Credit cards are actually very good in that they give you power and protection over unauthorized purchases and identity theft. Like Librarypt says, there's no need to max out the card or anything like that. I just use it to make certain online purchases and immediately pay if off. If you already buy things that are within your budget, just do as you're already doing and you'll be fine.
posted by extramundane at 9:21 AM on September 4, 2014

Don't think of your credit card as Credit. Think of it as a debit card you don't have to pay transaction fees for. Don't spend money you don't have, but DO use your credit card for all your daily little purchases. (I got mine at 17 or so with no job, so a responsible PhD student should have no problem getting a little student card with a low limit...I would think. Especially if you have an established history with your bank.)

I've now got a 750+ credit rating at the tender age of 26, just because that's how I used it. I pay my card off in full every month. It's not some scary, mythical thing, it's just money in/money out. Don't think of it as future-magic money.

I have the basic, no-fee cashback card at my local bank...and they give me $200+ a year just for having money going in and out of it. I have a credit limit that would SCREW ME if I used it all. But I'm not going to, and having awesome credit means that if I ever need to borrow money (I recently had to borrow $3000 for wedding expenses), I'm not going to get screwed by a bad rate. Because I used my credit card responsibly, I was able to open a near-prime rate line of credit. I'm quite happy to give the bank $5 a month for having $3000 right now. That seems fair to me. I can pay it off *in time* without a problem, and I don't have to worry about a big spike in my expenses right now.

Credit is awesome if you're realistic about it. Just don't be scared of it, or too optimistic about paying it off.
posted by aggyface at 9:26 AM on September 4, 2014

As rogerb mentioned, you can help yourself build good credit by reliably paying back student loans. I wouldn't necessarily recommend following my path exactly and YMMV, but I've found myself with a high (not perfect, but high) credit score after 3 years of making on-time student loan payments for my undergraduate and graduate degrees. I've never had a credit card, but paying my student loans has been surprisingly helpful for building good credit, which in turn has allowed me to pass credit checks for renting apartments and qualify for a conventional mortgage.

Again, getting a credit card and using it responsibly sounds like a great plan for you. I wouldn't recommend following my path because my credit has a fair amount of installment debt (student loans) and no revolving debt. But I want to point out that if you do have student loan debt, make sure to pursue whatever programs you need (e.g. Income-Based Repayment, Income-Contingent Repayment) to pay on-time, because it could help you with your goal of establishing good credit.
posted by brackish.line at 9:28 AM on September 4, 2014

There is likely a credit union associated with your school. They will have a credit card designed exactly for your situation, and it will be easy to work with them in regards to the credit issue. The big banks often have hidden fees on their student cards, and they can end up costing you money. Don't worry too much about interest rate (you'll only be charged if you don't pay off the balance in full every month), and look for a card with no fees. As someone mentioned, it may need to be a secured card at first. That essentially means that they will "hold" the amount of your credit limit in an account you can't touch. You can typically get interest on the pledge amount, though.
posted by stoneweaver at 9:39 AM on September 4, 2014

My first card was a store credit card that was also Visa-branded, a student card with a $250 credit limit. I would use it for my gas, pay it off every month, and after having that card for 7 years, paying on time, etc., I have a limit of $5,000 and a credit score in the low 700's -- decent for somebody my age, for sure.

I use it as a debit card, pay it off every month, and stick to my budget. I never go near my limit anymore. Starting with a student credit card and opting to do one expense per month on the card, paid off every month, is a great way to get started using credit cards until you're more comfortable with the entire process.

Discover has a good student card, as would a local credit union.
posted by PearlRose at 9:57 AM on September 4, 2014

- always pay your bill in full
- never spend more than 1/3 per month of your credit limit (actually I keep mine to 1/4 or less except in emergency uses)
- do not fall into the trap of minimum payments
- always pay your bill on time, set as many calender/text/email reminders as you have to in order to get this done

Be aware that whatever card you get right now will have shitty terms wrt interest levels. This will not apply to you so long as you always pay your bill in full.
posted by elizardbits at 10:16 AM on September 4, 2014 [1 favorite]

Seconding the tips to use it exactly as you're using debit and cash now (never ever spending more than you have in the bank), pay it off in full and on time, and ask your bank about no-fee credit cards for students.

I'm concerned about the zero income (for the rest of your PhD?) combined with "some" savings. As someone in the same trenches, PhDs can stretch out longer than you think, and especially when you're not used to having a credit card, it can be very tempting to carry a balance for "just a few months, until I graduate and start earning money". Very bad idea - tends to snowball slowly into a huge credit card debt. So hopefully you have some kind of plan to support yourself until you can both graduate AND lock down a job. Student loans, if nothing else, are much much better than carrying any balance on your card.

Just ignore me if you have that all sorted out already - I don't mean to be condescending, I know it probably sounds obvious, but I've seen too many other PhD students fall into a similar trap to ignore the possibility.
posted by randomnity at 10:22 AM on September 4, 2014

Here's a comparison list of some secured credit cards with reviews.
posted by Librarypt at 11:08 AM on September 4, 2014

Too many years ago to contemplate, Discover and American Express were willing to take a risk on starting-grad-school me not having any credit history. They've been repaid very, very well - I still have (descendants of) those cards.

The link to student cards above is good. Alternatively, the suggestion to talk to your local / university credit union is also a good one.
posted by RedOrGreen at 12:57 PM on September 4, 2014

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