First credit cards can make or break you. Here’s what you need to know.

Americans of a certain generation will remember it well: You arrive at college for orientation week and the first thing you see are tables and tables staffed by chipper credit-card representatives — all trying to get you to sign up for your first card, dangling fun giveaways (including kegs of beer) and promises of low balances and high credit limits.

This freewheeling era came to an end in 2009 with the Credit Card Act after various groups — representing civil rights, labor, seniors and others — banded together to advocate for reform. Among the regulations were stricter rules about marketing cards to young people, banning those kinds of promotions.

Despite these protections, newly minted credit-card users have reasons to be wary. For one, the legislation left plenty of loopholes for credit card companies. But the broader economic climate is also a driver of debt. Hammered by soaring costs in everything from housing to car insurance, young people are increasingly relying on credit cards to cover basic needs — with debt spiking as a result. According to Experian, credit card debt among Gen Zers jumped over 14% from 2022 to 2023. And a fresh report by the New York Federal Reserve found that those aged 18 to 29 have the highest rates of delinquency for any age group — well over 2%.

Here’s what you need to know if you’re a student about to sign up for your first credit card.

Focus on your credit score, not your credit card

Young people in particular are inclined to get their financial advice through social media, such as Instagram and TikTok. Sometimes these platforms are a powerful tool for financial transparency, including among young women. But they can also offer inaccurate or misleading advice, including about buying homes, running side hustles and paying taxes.

One example of these misconceptions is that you need to build up credit card debt to establish a strong credit score. While a credit card is indeed often the easiest way for a young person to establish a credit history, that credit has to be managed carefully. The best way you can boost the score is to take careful steps to show creditworthiness without risking too much — such as piggybacking onto a parent’s card first, or making only small purchases that can be paid off.

Marisa DiBenigno, a certified public accountant and financial coach who works with community college students, recommends that students start with a secured credit card, which she calls a “credit card on training wheels.” This requires a security deposit, usually equivalent to the card’s credit limit, that can be held as collateral if someone has late or missed payments.

Another myth is that the more credit cards you have, the better the credit score. In fact, the more frequently you apply for a line of credit within a short window, the riskier you look to credit card companies and scoring agencies. This can lead to some of your applications getting denied — which could also ding your credit score.

Danial Khan, who manages a financial wellness program at Stanford University, says “only a handful” of the hundreds of undergraduate students he has worked with understand what makes up a good credit score. In many of the workshops he regularly holds for all ages, participants uniformly cite credit cards as the most important topic they needed to know about.

Don’t let advertising and emotions get the better of you

Unsuspecting students can be easily misled by online sources that claim to offer independent advice on credit cards — but don’t clearly disclose that they are sponsored by a credit card company. Khan suggests instead that they talk to trusted friends and family members for advice and read widely among “best of” lists — as well as checking the Better Business Bureau — for a more holistic view.

Khan also encourages young people to build mindfulness around their spending, rather than justifying shopping as “retail therapy,” just to note one example. He advises them to periodically reflect on how their spending relates to their emotional state, so they stay clear of common pitfalls such as ordering more takeout during stressful times like finals week.

Another tip he suggests: Students should take note of when they tend to use cash, and when they use their credit card, to see when emotions are driving spending. His inspiration is an academic study — with the memorable subtitle: “Consumers pay with cards to remember and cash to forget” — that concluded people are more inclined to use cash when they buy something they might regret later, because they don’t want a record of the purchase.

But the inverse is also a risk: Students may wind up relying on credit cards when there’s a cash shortfall — and build up debt unexpectedly.

Banking apps can be your downfall

Young people are overwhelmingly tied to their bank through a phone app as opposed to conventional means. A study last year by the American Bankers Association showed nearly two-thirds of Gen Z and millennial consumers access their banking information primarily through a phone app, with less than 15% using an online portal such as a computer’s browser.

While checking balances and paying bills from a phone is convenient, the way the information is presented on a small screen can obscure important details, DiBenigno warns, especially for young people who live on their phones. This format can get them “confused” with the display of different balances, such as minimum payments, pay-in-full balances and accrued interest, she explained. Figuring out something such as annual percentage rate is tricky, she said, adding: “None of my students know their APR.”

Instead, she suggests they get off the app and look at a statement online, either on a computer or as a printout, that shows full year-to-date information, including interest and penalties paid.

Keep your credit card account active once you open it

In Khan’s experience, students can make the mistake of opening a credit card account to make their initial big-ticket college purchases, such as textbooks or electronics, with the aim of switching to cash purchases for day-to-day expenses. If card companies see a subsequent lack of activity, they could decide to close it down. That can be worse for your credit score than initiating by yourself a closing of the account.

Khan’s final piece of advice to all his students is to identify their own “core values that are related to spending.” Value-driven decisions “can help you feel better about your spending and align with any goals you have,” he said.