Student Credit Cards – What to Look for When You Apply

student credit cardsThis guest post was written by Jason Bushey. Jason is a personal finance blogger.

Ah, the joys of college. The late nights, the library cram sessions, the … credit card offers.

OK, so we get nostalgic about a lot of things when it comes to college, but credit card offers aren’t one of them.  But did you know that some of the very best credit card rewards and perks you’ll ever enjoy can be attained when you’re labeled a ‘student’?

In 2013, credit card companies are providing more incentives than ever for college students to begin building credit early. And given the importance of an established credit history in an age of more cautious lending, it’s never been more crucial for consumers to begin building credit early, especially in college.

The good news is that student credit cards have never been better. If you’re a student with limited or no credit, that’s no reason to stop you from taking advantage of credit cards that include lucrative rewards programs, low ongoing interest fees and intro periods that start anywhere from 6-12 months.

But before applying for a student credit card, there are of course some things to consider when finding the right card for you. Here are some of the basics to look out for…

 

Student Rewards

When you’re a college student, anything ‘free’ is especially helpful because, let’s face it, this isn’t necessarily the most lucrative time in your life. This is what makes student credit cards with rewards so popular – they rewards college students on the types of purchases the average student is going to make, anyways.

A student credit card that rewards you for purchases made on entertainment, dining out and at the campus bookstore is most helpful. When applying for a student rewards credit card, be sure to consider how rewards are earned to match up the right student credit card for you.

That way, you’ll earn the most “free” money or rewards without diverting from your usual spending routine. Don’t make your budget fit to a student credit card; make that credit card fit for your personal budget.

 

Student Credit Cards and Intro Periods

If you’re unfamiliar with intro periods, these are essentially the time in which you pay the least amount of interest and, in some cases, can accrue the most rewards.

Intro periods are sort of like a signing bonus on a student credit card, and they often include as little as 0% interest for anywhere from 3 to 12 months and beyond depending on the credit card.

Most credit cards for students with limited or no credit apply the intro period to purchases only, which is useful in case you plan on carrying a balance. However, it’s important to remember that when an intro period ends, the balance you’re carrying will be harder to pay back since interest will now be applied to that card.

In general, student credit card interest fees range anywhere from 12.99% to the mid-20’s based on a student’s credit history. No history means higher interest – that’s a life lesson that extends well beyond the college years and explains exactly why college students should make establishing credit early a priority.

Remember to consider the length of an intro period when applying for a student credit card, especially if you think you might carry a balance.

 

Student Perks

We mentioned earlier that some of the best credit card perks are aimed at college students. What did we mean by that?

Well, some credit cards for college students reward credit newbies for simple practices, like paying a bill on time. Others will waive your first late payment, which can range as high as $35 or more.

More and more, credit issuers are acknowledging that learning how to use credit responsibly can take time, and they’re becoming more sympathetic to credit card newcomers.

That said, they’re also vying for brand loyalty from the younger demographic. That’s why credit card issuers like Discover, Capital One and Citi each feature some really strong  perks on their respective college student credit cards. Students are longer forced to choose between lower interest or high rewards since the average student credit card is now equipped with both.

The strongest credit cards for students in today’s market include the Journey (SM) Student Rewards from Capital One® Card, which rewards students with a 25% cash back bonus for monthly on-time payments, and the brand new Discover it™ Card, which offers flexible payment plans and 5% bonus cash back on rotating categories.

 

Take-Aways

The two most important things to take away here are as follows:

  1. It’s absolutely imperative for students to begin building their credit history in college, especially in today’s era of stagnant lending and
  2. College students now have some really great options when it comes to choosing the right student credit card for them.
Get Rid Of Your Student Loans - Legally!
Sign up below and discover 3 ways to ditch your student loans.

A lot of places will tell you that you can't get out of your student loans. But guess what? There are ways to do it, and I give them away for free right here.

  • http://www.frugalrules.com John S @ Frugal Rules

    Good post. My credit card debt all came when I was in college as I had little experience with them. It’s good to see that they’re finally starting to become more empathetic to the fact that many students have little knowledge. I think some of the things that we’re starting to see like the Discover it card make it more promising.

  • http://thisthatandthemba.com Christopher @ This that and the MBA

    My credit card debt came when i got out of college. I worked during college and had poorer roomies so that helped keep me in check. I remember those days when you would see the people holding the clipboards and head the other direction because you knew you were going to be hit up to sign up for something…mostly a credit card…I acquired a few shirts that way :-)

  • http://prairieecothrifter.com Miss T @ Prairie Eco-Thrifter

    Great tips. I got my first card when I was in college. It helped start my credit rating but I needed to learn how to use it responsibly. It is way to easy to just charge everything. The knowledge has to go with the power.

  • http://www.teensgotcents.com Eva

    Is it really necessary to get a credit card in order to establish credit? It seems like so many people get in trouble with credit cards that it may not be worth the risk. I am trying, but still have a lot to learn about making wise financial decisions.

    • http://thecollegeinvestor.com Robert

      Yes and no. You need credit to build credit, and it happens that credit cards are usually an easier way to get credit and start building a credit history. Many people do get into problems with credit cards, but it isn’t having them that’s the problem – it’s using them responsibly.