Credit cards for college students are a hot-button topic – and not without reason. With student loan debt on the rise, many advise students to steer clear of credit cards altogether. Some people think it’s even unethical to market credit cards to college students.
At the same time, responsible credit card use can help young adults build financial management skills – and their credit! Responsible use of student cards like these could set college students up for an easier time of renting an apartment, buying a home, getting utilities, and more once they’re on their own.
Either way, educating students about credit cards is essential. Because the fact of the matter is that they’re going to have the opportunity to obtain credit cards like these!
If you’re a parent interested in teaching financial responsibility, or a college student in need of an emergencies-only credit card, you’ll want to check out cards that require low or average credit. Here are some great options*:
1. Discover it® for Students
The Discover it® line is generally easy to use for anyone, and the student card is no different. It’s a good option for teaching students about their credit, since it offers free access to your FICO® Credit Score. You can get your score online or on your monthly statements. The card also offers student-friendly perks like no annual fee, no overlimit fee, no foreign transaction fee, and no late fee on your first late payment.
Cash Back Perks: Students can earn 5% cash back on rotating categories when they sign up for categories quarterly. In 2015, the first quarter bonus categories are gas stations and ground transportation. Plus, the card offers 1% cash back on all other purchases (think textbooks!).
Monitored Purchases: All purchases are monitored, so you’ll get alerts by email, phone, or text about unusual purchases. This lets students stay on top of their card. You can also sign up for free text alerts to remind you when your payment is due, as well as a free mobile app that gives you account access on your phone.
Introductory APR: The card offers 0% introductory APR on purchases for 6 months, and then a variable APR of 12.99% to 21.99%.
Fees: This card doesn’t have any foreign transaction fees, and there’s no annual fee.
No Penalty Interest Rate: The first time you miss a payment, you won’t pay any fees at all. After that, you’ll have late fees, but your interest rate won’t automatically jump.
Bottom Line: With its introductory APR, this card is a good option for smart financing. Use it to buy textbooks for the year, and then pay them all off within six months for free financing. It’s also a good teaching card, with the penalty-free late payment for the first payment.
2. Capital One Journey Student Credit Card
This is a simple cash back credit card that offers 1% cash back on purchases, plus a 25% bonus cash back each month you pay on time. So, basically, if you pay on time each month, you can get 1.25% cash back on all purchases.
Credit Monitoring: This is another good card for monitoring and building credit, since it offers free access to your credit score. The Capital One® Credit Tracker offers some valuable tools, as well, including a what-if simulator where you can experiment with different financial actions to see how they’ll impact your credit score.
Credit Increases: When you may 5 monthly payments on time, you can get access to a credit line increase. Since debt-to-credit ratio is an essential part of the credit score equation, this can be a great way to help students build credit.
Fees: This card has no annual fee, and no foreign transaction fees. It’s great for that semester overseas you’ve been dreaming of.
APR: This card has a 19.8% variable interest rate on purchases.
Bottom Line: This is a good credit-building card, since it allows for a credit line increase within just five months of on-time payments. However, it’s got a higher interest rate – even for students who already have good credit – so it’s not a good option for financing larger purchases.
3. Citi ThankYou® Preferred for College Students
This card offers students access to the ThankYou® Rewards program, which offers flexible rewards for spending. You’ll get 2 ThankYou® points per $1 spend on restaurants and certain types of entertainment, and 1 ThankYou® point per $1 spend on other purchases. You can rack up unlimited ThankYou® Points, and redeem them for a variety of gift cards – or for statement credit.
Bonus: Many student cards don’t come with a bonus, but this one does. You’ll get 2,500 bonus ThankYou® points when you spend $500 in the first three months of membership.
APR: This card offers 0% introductory APR for 7 months. After that, the variable APR is 13.99% to 23.99%.
Other Perks: Citi lets you choose your payment due date, so you don’t have to worry about missing payments. You’ll also enjoy the Citi Price Rewind perk, which means that Citi will search for a lower price on items you buy. If they find a lower price within 60 days of purchase, you could be refunded up to $300 per item and up to $1,200 per year.
Bottom Line: This is the only card on the list that comes with a spending bonus. Plus, it has the introductory APR. Again, it could be a good option for paying for textbooks. Spend $500 on textbooks, get 2,500 bonus points, and then pay off the $500 within 7 months for interest-free financing.
4. Wells Fargo Cash Back College Visa® Card
Here’s a great cash back card for students. You’ll get 3% cash back on gas, grocery, and drugstore purchases for 6 months, and then 1% cash back in all other categories every day.
APR: This card has an introductory rate of 5.9% to 13.9% for 6 months on balance transfers, and then 11.15% to 21.15% after that. It does have balance transfer fees, though.
Annual Fee: The card has a $0 annual fee.
Redeem Rewards: You can redeem cash rewards in $25 increments. Sign up to have them automatically deposited into your checking account or savings account when you hit $25. Or, you can use them as credit on your credit card, request a paper check, or redeem your cash back for travel and more.
Credit Education Tools: You’ll get online and mobile tools for tracking your spending and payments. You’ll also get credit education tools, tips, and newsletters packed with helpful credit-building information.
Bottom Line: If you’re already in trouble with a high-interest credit card, this one could be a good option for paying down credit at a lower APR, especially if you can qualify for the 5.9% introductory APR.
* See the online credit card application for details about terms and conditions. Reasonable efforts are made to maintain accurate information. However all credit card information is presented without warranty.
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