How to Choose a Credit Card When You Are a Student
Published On September 8th, 2012

Let’s face it: College is more than beer, babes and books. For many of you, starting your college life is right around the corner, and it’ll be your first foray into what your parents probably call “real life”. You will be inundated with so much information in the first few weeks, it will make your head spin. One thing you are certain to see is your fair share of student credit card offers. College campuses are often littered with representatives from credit card companies looking to get you to bite. While they may be offering great stuff — like free pizza and T-shirts — don’t fill out that application! At least not until you read this quick introduction to student credit cards. In no time, you’ll be at the top of the class and know the good, bad, and the ugly that could be in that fine print you’re sure to overlook. It could save you time, and — most importantly — MONEY!

Crash Course 101: Introduction to Student Credit Cards

Student credit cards are made for, marketed to and designed for the college student. So, it would only make sense that, as a college student, if you are to apply for a credit card, it should be a designated student card. Sure, there are many card offers that will be flooding your campus. You will see store credit cards, niche credit cards, and even major credit cards, but it is important to focus on student credit cards for two reasons:

Student credit cards are designed for students and are, therefore, more likely to accept a student.
As an incoming student, odds are good that you lack appropriate credit history, credit score, and positive credit attributes that would give you rates on non-student credit cards.
The ultimate goal for you, when choosing a student credit card, should be to build a positive credit history as early as possible in your young life. Sure, it will also help with everyday expenses, too, but practicing good spending and repayment habits will benefit in the long run, and it all starts with choosing the right card.

Many student credit cards offer great perks for students. Some offer rewards incentives for paying their bill on time, paying their balance in full, and other goodies that reward good financial responsibility. Some offer points for every dollar you spend. You also can find cards that offer no interest rate for a long introductory period that can ease you into the confusing word of APR’s. Overall, it is important to know that college student credit cards are designed for you for a reason. They are more likely to accept you, more likely to offer you perks related to your needs, and more likely to offer you the lowest rates.

Crash Course 201:  What to Look For

The one thing most experts agree on, choosing the card that has the lowest interest rate is a sure fire way to dumb-down all of the offers coming your way. You surely will be shown offers having a 0% APR through an introductory period of three, six, nine or even more months.  However, after that period, you could be locked in to a very high interest rate, which could put you into dire financial straits for years after you’ve graduated. However, don’t fret. You may be told as a student, a 24% APR could be the best you could get because you lack credit history. But, that is NOT TRUE. Even as a student, you should have no problem finding a card with an interest rate in the mid-teens. You should not even look at any credit card offer that offers you an interest rate above 20% regardless of the perks that card comes with.

Some other quick tips on what to look for:

When it comes to fixed or variable APR, there are advantages to both. However, if you are lucky enough to get a low fixed rate, go for it and walk away with a smile.
Many cards come with an annual fee, but there are just as many that do not have an annual fee.
Never sign up for a card that requires you to carry a balance. Make certain you read the fine print and find out if the card mandates you keep a balance on the card.

Crash Course 301:  Rewards and Perks

It is important not to be overwhelmed with the rewards and incentive programs when choosing the right card. Nearly all of them reward you for spending more than you are probably capable of repaying. So, it is important to note that you should only look for cards with low rewards threshold and that reward you with points for common college student purchases. Some common college student purchases are gas, books, music and food (both groceries and restaurants). Also look for reward thresholds. Many times, you may not be able to redeem your rewards until you hit a certain high threshold. And look for spending caps on each category.

Crash Course 401:  The Best of the Best

Now that you’ve graduated our crash course on student credit cards, we’re here to make this an easier choice for you. So, what kind of teacher would we be if we didn’t give you the answer? There is an array of student credit cards throughout the market. They are for students with no credit or bad credit — cards that will approve you instantly. However, the tips above will serve you well when you are looking at a pile card offers that are sure to be at your school this fall.  With that said, here are some of the top cards available.

JourneySM Student Rewards from Capital One
Citi Dividend Platinum Select Card for College Students
Discover Student More Card

Chris Mettler is the president and founder of Compare Cards and has been educating consumer on managing credit and personal finances for more than 10 years. Compare Cards offers simple solutions for finding the right personal, business or student credit card.

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