Picking the Perfect Student Credit Card
Before you earn any college credits, you get bombarded with offers of financial credit. When you’re away from home, having credit is very important for basic expenses as well as traveling from home to campus, depending on how far away you move.
Of course, credit also helps you trick out your dorm room from that awful, institutionalized look to something that resembles your personal style. Getting the credit you want starts with completing a credit card application.
You’ll find banks and credit card companies vying for your business all over campus. Some offer food (free slice of pizza, anyone?), some give away magazine subscriptions, and others toss trendy tee shirts at you if you sign on the dotted line.
But none of those so-called gifts are the reason you should choose a credit card. Every college student likes freebies, but this decision has a far-reaching, long-term impact on your life. It’s too serious to base your decision on a cheap freebie.
Don’t rush to complete the first credit card application that’s thrust into your hands. Get at least three applications and compare the deals offered to you – or better yet – shop online and compare benefits.
These companies are all willing to give you credit, perhaps the same initial amount of credit. So what features matter most? First, you need to know what the credit card will cost you (or mom and dad if they’re footing the bill).
One cost is the annual fee and the other is the interest rate on your balance. Your best choice is a credit card with no annual fee. Why pay this when you don’t have to? Taking time to shop for a good deal will turn up a no fee card.
Typical interest rates range from 12% to 18% on your balance. The term APR refers to “annual percentage rates.” There are more features that can attract you to a specific credit card company.
You may be able to get an affinity card, which is a credit card with your college or university logo. Other groups also have affinity cards – including political, environmental or social causes.
Some credit cards offer points that can be used for travel or gift rewards. You earn these points by paying your minimum balance on the due date and keeping within your credit limit.
If you frequently shop at stores, restaurants or travel sites that offer points, then you can get more for your money with this type of credit card. Other cards offer cash back – based on eligible items purchased from grocery stores, drugstores, convenience stores or discount stores.
It’s okay to eat the snacks and listen to the pitch from the on-campus credit card presentation. Just remember that some of these companies hire students who only know a few sales lines and don’t really have all the answers that you need to make an informed decision.