This 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…
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.
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.
The two most important things to take away here are as follows:
- It’s absolutely imperative for students to begin building their credit history in college, especially in today’s era of stagnant lending and
- College students now have some really great options when it comes to choosing the right student credit card for them.