Alert Your browser is out of date and not supported. We recommend
you update your browser for a better online banking experience.

What I Wish I'd Known About Credit Cards in My 20s

If you didn't give your credit health much thought in college, chances are it will become a top priority when you're ready to apply for a mortgage, personal loan, or even a job.

"Credit histories can be obtained by certain eligible requestors, from landlords and employers to banks and mortgage officers," explains Matt Hylland, a financial planner at Hylland Capital Management, which specializes in advising people who are just starting out. "A high credit score can mean a lower security deposit on an apartment, better employment prospects, and a lower mortgage payment. The best way to take advantage of those types of benefits is to establish credit as early as possible, and use it responsibly."

One way you may possibly begin building credit history is to use a credit card regularly and make payments on time. Of course, this strategy can be easier said than done when you're fresh out of school and potentially living paycheck to paycheck. To help you figure out how to establish a solid history of credit use and still make rent, we asked four people to share the big-gest lessons they've learned about credit cards – and how that knowledge would have helped them when they were just starting out. (Want more tips that may help with establishing credit? See 5 Ways to Start to Build Credit After College.)

'I wish I'd known more about the importance of having a credit history'

"I'm naturally conservative when it comes to money, and as a result, I mistakenly thought that I needed to avoid using credit cards when I was younger. I always presumed this decision would benefit me in the long run," says Michael Parslow, 41, of Houston, TX. "It wasn't until after college that I learned that having a healthy credit score and building a good credit history can help when applying for things like a mortgage or a car loan, and that being a responsible credit card owner is one way of building credit history."

'I wish I'd researched rewards credit cards'

"I started working on building and improving my credit history in my early 20s, years before I got a mortgage, at age 28," says Stephanie DiStefano, 39, of California. "I used a credit card regularly to pay for everyday items, like gas and groceries, and also saved up money to put toward my down payment. After I bought my home, I was nervous to spend a lot on a credit card, so I tapped into my savings to renovate and furnish my house. In hindsight, I realize that with the right credit card, I could have built up rewards, like airline miles or points, which could have helped me make my money go further. Now I research the benefits that different cards offer. My current card offers points on purchases, which I can use to pay for things for my home or spend on gift cards — all of which saves me money."

Related: How Do Cash Back Credit Cards Work?

'I wish I'd managed my spending more responsibly'

"When I was in college, I got myself into quite a bit of debt by not paying attention to what I was spending each month," says Ruth Jackson, 33, of Boston, MA. "I wish I had thought about the implications of having to pay off my cards over several years, because when you're in debt, you have to plan your life and spending around getting back on top of your finances again. It wasn't until later that I learned how to budget, how to easily cut back on expenses during tighter times, and how to differentiate between what I needed to buy and what I simply wanted to buy."

'I wish I'd read the fine print'

"My only financial regret from my 20s is that I didn't spend more time learning how to use credit cards effectively," says Natalia Bond, 31, of New York, NY "Right out of college I accepted the first card that was offered to me and didn't really pay attention to the interest rate or the fine print. While I didn't get into huge amounts of debt, I only paid off the minimum each month, which meant I paid interest when I really didn't need to. I've since learned to look into cards that have lower interest rates, and I now recognize the benefit of paying off more than the minimum payment each month."

While mistakes like the ones above can be easy to make when you're just starting out, adopting good financial habits and building your credit early on can benefit you for years to come. After all, as Hylland points out, it can take at least eight years of positive credit history to reach a credit score of 720 or above. "Your length of credit history is an important aspect to your credit score, and a great way to help build up a credit history is to establish credit early on," he says. "If you can begin to establish credit in your 20s, you may be well ahead of the pack in a decade."

For more helpful insight into establishing your credit and credit scores, read our guide on How to Help Build Credit.

Additional Resources

Utilize these resources to help you assess your current finances & plan for the future.

FICOŽ Score

Learn how FICOŽ Scores are determined, why they matter and more.

Glossary

Review financial terms & definitions to help you better understand credit & finances.

CITI® CREDIT CARD

Citi cards with no annual fees for you

Whether you want Cash Back, Great rewards, No Late Fees, or a Low Intro Rate, the choice is all yours.

Get started

Security Center - Learn more about identity theft and fraud.

Sign On Search Citi