Best Credit Cards For College StudentsThe "starving student" cliché may be an exaggeration, but there’s some truth there as well. Students typically don't have significant disposable income, and most haven't much of a credit history either. Students need to look for cards offering affordable terms and modest credit limits and use them responsibly to begin building a good record. You'll need to get your hands on a card that reports to all three of the major credit bureaus and make all payments on time. It’s best to have something with low fees and an APR that won't strip your pockets over time. Your ideal target will have features aimed at college students and cash back rewards on necessities such as food, gas, and dining out.
So which choices are best? Look at this list and see what's best for you.
Capital One® - Journey® Student RewardsDetails - This card’s biggest benefit is its cash back program, which earns you 1% back on every purchase without any annoying limits or spending categories. Making your payments on time will also get you a bonus of 0.25% back on every purchase you made in that billing cycle. You even have a choice on how you redeem those rewards: get them in the form of credit on your statement or request incremental checks for $25 each. That is a nice feature if you need some extra cash on hand.
The bonus 0.25% is one incentive to making payments on time, but there's another. If you keep up that good habit for five months, Capital One will reward you with a higher limit. You'll get access to a cool tracking service from Capital One with some great benefits, including unlimited access to your FICO score, and a "what-if" simulator to help you make financial decisions. You don't have to pay an annual fee, there are no foreign transaction costs, and the fees you do pay are minimal.
Catches – You won't be able to make balance transfers. Cash advances will cost you 3%, and late payments will sting you with a $35 fee. There's no introductory APR, and the variable APR on purchases and cash advances will cost you 24.99%, which is high! The sour cherry on top of the catch-cake: there's no signup bonus.
Final Thoughts - That high APR might seem like a deal-breaker, but it would only really affect you if you keep a balance. With so many benefits to paying down your balance in full, why would you leave a balance on it anyway? This low-fee card has some great features, no penalty APR, and it only requires a decent score. It could be an awesome option if you pay your bills in full and on time, which you should be doing in any case!
Citi ThankYou® Preferred Card For College StudentsDetails - This card gives students some excellent benefits. It's uncommon for a student credit card to come with a signup bonus, but this one does! If you spend $500 or more within the first three months, you'll get 2,500 bonus ThankYou points. You get an introductory 0% APR for the first seven months, and there's no annual fee.
While the rewards points might not be very valuable, the Citi program certainly is one of the most versatile. What does that mean? Value wise, every $1 spent on entertainment and dining will earn you two points, while you'll earn 1 point per dollar on anything else. The points aren't worth a whole bunch, typically $0.005 and $0.01 each depending on how you redeem them, and redemption doesn't start until you reach 1,000 points. The plus point is that you can spend them in an unusually large number of places: at major merchants, travel purchases, cash back, statement credits, and online shopping purchases. For example, most cards don't allow you to use your points towards Best Buy. That's not an issue with this one, so you can go right ahead and use your points at Best Buy!
Catches - After that introductory APR period ends, you'll have a variable APR of 15.74% to 25.74% depending on your credit score. Cash advances carry an APR of 26.49%, while the penalty APR sits at a whopping 29.99%! You've probably noticed the pattern already: don't run a balance and make payments on time!
You'll pay $5 or 4% for balance transfers (whichever is higher), cash advances cost 5%, foreign transactions will cost you 3%, and any late payments will ding you for $35.
Final Thoughts - As we mentioned before, the value of the points might be low, but the many ways you can use your rewards make up for it. The biggest caveat is the high APRs. However, if you pay your balance on time and don’t maintain a balance, that shouldn’t be a problem. This card could be an excellent choice for you.
Discover it® For StudentsDetails - This card has an introductory purchase APR of 0% and a balance transfer APR of 10.99% for the first six months. You'll get 1% cash back on all purchases, there's no spending limits or restrictions, and you get an even bigger cashback percentage in certain categories. Each quarter, categories such as gas stations or department stores, will rotate in availability. When a particular category is active, all purchases in that category will get you 5% cash back, limited to $1,500 per quarter.
You can redeem your cash back benefits in multiple ways, which is a nice feature! Choose a credit on your statement, check, deposit into your bank account, or even credit to purchase things on Amazon! There’s even more: the company will double the cash back you earn in your first year. That will get you through all that darn holiday gift shopping. If you're a good student, a GPA of 3.0 or above each year will get you a bonus $20, for up to 5 years. There are no annual fees or foreign transactions fees, and you can get a free FICO score each month.
Catches - This is probably the biggest catch for students: you'll need excellent credit to qualify for this one. There's a cost of 3% on balance transfers, 5% on cash advances, plus a late fee of $35, which is all standard stuff. After that introductory APR period ends, you'll be looking at a minimum of 13.99% to 22.99%, based on your credit score. The APR on cash advances will also jump to 25.99%.
Final thoughts - This card a great choice for students. The jump in APR is relatively low, and as mentioned a dozen times already, it'll only affect you if you keep a balance. It has some of the typical fees and catches, but the real cash back opportunities and $20 bonus for a good GPA more than make up for those. As long as you've got good credit, this card is worth having.
The Bottom LineWhichever card you choose, you’ll need to focus on following two basic rules: don’t keep a balance and make payments on time. If you can manage both, you can make any of these cards work for your credit building endeavors while picking up some benefits along the way. Check out the links and figure out which one works best for you. You'll find that real-world credit management is one of the most practical skills you can work on while you're learning all that other stuff in the classroom.
Find them here:
Capital One® - Journey® Student Rewards
Citi ThankYou® Preferred Card for College Students
Discover it® for Students