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Best Student Credit Cards For College Students

November 16, 2009 by Guest Blogger

Should your college student own a credit card? That’s an interesting question that many parents dwell upon. This much is true: applying for and finally receiving that first credit card is a big step for any individual. I believe that it can be helpful for someone to become exposed to using a credit card early (with caveats), depending on how “ready” for this exposure the individual is. With the appropriate guidance (and guidelines), using the right kind of credit card can prove to be a helpful financial tool for a student. What distinguishes a student credit card from all other cards? Usually, they offer lower interest rates and a lower spending limit than regular credit cards.

Let’s start out by identifying which credit cards may be most suitable for college students. Then we’ll cover some important points about card use.

Best Student Credit Cards For College Students

Here are a number of good rewards credit cards that are geared towards the younger set:

1. Discover Student Card: You’ll earn 5% cash back on choice spending categories such as travel, gas, restaurants and groceries and 1% cash back for everything else. The Discover Student Card is also a 0% APR credit card that offers no interest rate for 6 months for new purchases. It has no annual fee.
For more information, please visit this link.

2. Citi mtvU Platinum Visa for College Students: This card has no annual fee and offers 0% APR for 6 months for purchases if you qualify. This is a rewards card that will give you 5 reward points for every $1 you spend on books, movies, music and restaurants. For $1 spent on everything else, you’ll earn $1. You’ll also earn 25 reward points per month if you stay below your credit limit. There’s also an incentive to get good grades: earn up to 2,000 reward points twice a year with proof of a good GPA. Check out their “GPA vs reward points” table:

For more information on Citi mtvU Platinum Visa, you can check out this link.

3. Citi Forward Student Card: Here’s another no annual fee rewards credit card that rewards you for good behavior. It’s also a 0% interest credit card that won’t charge you interest for 6 months for new purchases. With this card, you’ll get 3,500 bonus points after spending $250 in 3 months, 2,500 points when you go paperless and 5 reward points for each $1 you spend on restaurants, music, books and movies. You’ll get 1 reward point for each $1 spent on everything else. For managing your credit well, you’ll be eligible for up to a 2% reduction on your APR and an extra 100 points per billing period. For more details, check out this link.

Tips For Using A Student Credit Card

I am a firm believer that one’s money management habits are forged at a young age. I believe that anyone can learn how to manage money and understand credit cards while in college or shortly thereafter. But on the flip side, if you aren’t savvy with money or tend to hang out with friends who are spendthrifts, you may end up developing some bad habits. If you are a student and want credit, you need to understand what you are getting into. It would be great if all of us learned about money management and paid more attention to the basics of credit card use right when we start using credit cards.

I learned a few things when I got a hold of my first few credit cards — that there’s a right and wrong way to use them. Like anything else, there are pros and cons to using a student credit card. Let’s review some of these points:

The Pros

For students, one big benefit that credit cards provide is the convenience that they offer when there are emergencies. Who knows what emergencies a student will encounter, and it is comforting to know that your college student can be financially covered with a credit card in such cases. Typical scenarios might include vehicle breakdowns and attendant car repairs and towing expenses, motel bills, meals, doctor charges, or midnight apartment repairs, such as water leaks. But impromptu trips to the Bahamas certainly don’t qualify as an emergency!

Having a student credit card will help your child learn how to be financially responsible and will also help them develop a credit history.

Here are some ways to start off on the right footing with your college student: Teach your kids to use a credit card only if they can pay off their balance in full each month. Point out that using a card for installment payments is a no-no. Other good habits to develop include keeping one’s balance below the credit limit and always paying on time.

Finally, show your kids that by using a credit card in the “right” way, they can potentially receive rewards; and using cards irresponsibly can lead to financial problems later. Making these distinctions early should help your child develop a healthy outlook on debt, credit and money management.

The Cons

One of the biggest arguments against credit cards for students is the potential for these cards to get an unsuspecting teen into financial trouble. There’s the potential to develop bad money habits when you own a credit card: one month of not paying off your balance can easily snowball into something more problematic, and where can that lead you? When you accumulate debt early in your life, it’s a problem that becomes much harder to surmount.

A student may end up with several credit cards, repeating the same mistakes with each one. It therefore goes without saying that credit cards should be used with caution especially when a student is first starting out as a card holder. If you’re a parent, you must first determine if your child is ready to start using a card, and before you give them the green light for this, lay down your ground rules well in advance.

 
Contributing Writer: BEM

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