Student Credit Cards
How to Choose
Credit cards are a fantastic tool to have in your wallet as a college student. They are an easy payment method, and, when used properly, help you build a positive credit history, a key area that lenders will be looking for when you need to borrow money later in life, such as for a car or mortgage. Credit cards are also safe and secure, helping to minimize the impact of fraud on your finances. But with so many offers to choose from, the prospect of picking one can seem daunting.
Thankfully, some credit cards are designed specifically with students in mind. And there are ways you can ease the decision-making process. Follow these five steps when choosing the best card for your wallet:
- Research, research, research. Put your experience doing research for term papers to work. Those skills will come in handy when it’s time to choose a credit card. Each credit card has different features and costs, so you will need to take your time reviewing the options. If you simply settle with the first card you come across, you may be selling your wallet short.
If you do decide that you want a “short-term” card, keep in mind the impact this may have on your credit score. You get “points” for the length of your credit history – the longer the history, the better the score.
Having a cosigner means that your parent or another adult has agreed to take on the responsibility of your debt should you default on your payments. This is a big request to ask of your parent—if you miss your payments, it will not only affect your credit score but might affect theirs as well.
If you have income from a job, you may be able to qualify on your own.
- Interest Rate: The rate that is charged on your credit card balance, expressed as the APR (annual percentage rate). Usually, if you pay your balance in full within the designated grace period, you won’t be charged interest. Funds transferred from another credit card (balance transfers) typically have a separate rate.
Compare Student Credit Cards
Our Review. College students – whose pockets always have receipts from a restaurant and who always have a concert planned in their near future – stand to benefit from the Citi ThankYou Preferred. This rewards credit card was designed for students who frequently dine away from the dorm cafeteria and never pass up an entertainment opportunity, whether it s to the movies, a museum, an amusement park, or a live performance of a favorite band. Read full review
Intro APR (Purchases)
Intro APR (Balance Transfer)
Benefits of a Credit Card for College Students
from a Parent’s Point of View
College life is the time for your son or daughter to establish freedom and individuality – and a time to start establishing a good credit profile. College students are a big target for credit card companies. However, with the right attitude and strategy, your student can receive many benefits from a credit card as a new consumer in the spending world.
- Establishing Good Credit
The most important benefit of acquiring a credit card as a student is the chance to firmly establish a credit history. Believe it or not, the first steps taken with a credit card can determine a credit history, good or bad, for possibly decades to come.
An excellent strategy for your student is for him or her is to make small purchases and pay them off immediately, usually within a month. First, small purchases keep the available credit higher, and that’s a positive mark on a credit report. Second, making frequent payments to keep the balance at zero or just above zero shows that your student “pays as agreed” on his or her report.
Many credit card companies that offer deals with a zero percent introductory offer and zero annual fees. These benefits can help your student start smart by not being saddle with excess costs when using his or her first credit card.
Credit cards come with new responsibilities but they also offer good financial practice. Once they have a credit card, students must learn to budget and prudently manage their finances. Help your student set up a spending guideline that can be met each month. The figure takes into account what type of expenses should be charged, how much money should be used toward credit card debt, if applicable, and, regardless of the credit limit, the most they should charge on the card each month in your view.
Often, credit cards for college student will come with a low limit, which helps prevent overspending and overcharging.
Students often run out of money. Having a credit card for the first time can be a financial “buffer” for when they need a tank of gas to get home or a sack of groceries after they have spent their monthly budget.
Convenience is another benefit of credit cards. Charging gas, textbooks, or even groceries keeps students from having to carry cash all the time. However, be sure to help your student keep careful track of all receipts so he or she does not overspend.
Articles for College Students
By Kelly Teh – Tips