college students arenít exactly credit card happy
these days. But credit card issuers are rolling out some
attractive deals that are designed to put more plastic
youíre a college student shopping for a credit card,
itís possible to find some better rates and terms than
cards that were marketed to college students before card
regulations went into place in February 2010, according
to an analysis by CreditCards.com.
student cards tend to have competitive rates and
rewards," said Matt Schulz, senior industry analyst
sampling indicated that the average student card
interest rate is about 13.4 percent now, down from about
16 percent before the Credit CARD Act went into effect
in February 2010, according to CreditCards.com. The
student card average is about 2 percentage points lower
than the national average, as well.
Credit Card Accountability Responsibility and Disclosure
Act of 2009 put rules into place to protect young
consumers. Now, card issuers cannot send pre-approved
offers to students who are younger than age 21 without
the consumerís consent. Consumers under 21 years old
can qualify for credit cards if they have a source of
income, such as a part-time job, or a co-signer who has
the means to pay the bill.
issuers cannot use gifts or goodies to market credit
cards to students on campus or near campus and at
surprise, perhaps, but only 14.4 percent of consumers
ages 18 to 20 had opened at least one credit card in
2012. That compares to 33.6 percent in 2007, according
to data from the Consumer Financial Protection Bureau
Consumer Credit Panel.
we are seeing more efforts now to market to college
students by some issuers. Discover, for example,
launched an offer for new student card members that
includes an extra $20 bonus if their grade point average
is 3.0 or equivalent or higher each year they are
enrolled in school for the first five years after
opening the account. The deal is for students who apply
after July 23, 2015. Other rewards exist as well on
should you look for when shopping for a credit card for
college? Here are five tips:
get wowed by the signing bonus.
some credit cards are offering whatís seen as a
signing bonus to college students. The BankAmericard
Cash Rewards Credit Card for Students, for example, has
an online deal for a $100 bonus, if you make at least
$500 in purchases in the first 90 days of opening your
are you going to spend $500 on that card? Maybe, youíre
thinking youíd charge your tuition?
wonít work here. I went online to the Bank of America
site and asked that very question via an online chat.
online repís answer: "Tuition fees wouldnít be
counted. Only purchases made at retail store or online
be tempted to spend more than whatís within your
budget to get a bonus.
attention to the limits of 0 percent offers.
credit cards are offering some introductory rates of 0
percent on cards. But some of those intro offers can
range from six months to 12 months. Many of the 0
percent offers are on purchases; only a few offer 0
percent on balance transfers.
you get busy on campus with term papers and tests, itís
way to easy to forget that your 0 percent rate is no
longer available at spring break.
unions could have great rates for students, too.
are trying to build long-term relationships with college
students with some of these deals. But itís wise to
shop at credit unions, such as those connected to
various universities, to see if you could get a lower
credit card rate and a better deal.
University of Michigan Credit Union, for example, has a
Visa Platinum OptimUM card with a rate of 8.9 percent
thatís offered to all credit union members. The
rewards card version of this card has a rate of 12.9
percent. There is no annual fee and no charge for
balance transfers. But there is a 1 percent fee to
convert foreign transactions into U.S. dollars.
attention to fees and rates.
cards marketed to students do not have a penalty APR,
meaning your annual percentage rate wonít go up for
missing payments. But there might be other fees.
Discover It Chrome for Students, which does not have a
penalty interest rate, will waive your first late
payment fee. But after that, the late payment fee can be
up to $35.
want to review potential late fees, as well as interest
on some cards could be variable rates and set to go up
after the prime rate heads higher. Itís not a small
point, especially since most economists expect the
Federal Reserve to boost rates in the next few years.
Capital One Journey Student Credit Card lists a rate of
19.8 percent but itís a variable rate that would go up
with the prime rate. The card does have a credit tracker
to help students monitor their credit score, as well as
other tools to help students use credit wisely. It also
offers 1 percent cash back on purchases, plus an extra
0.25 percent cash back if payments are made on time.
K. Johnson, a spokesman for GreenPath Debt Solutions, a
nonprofit credit counseling agency, said too often
college students wonít shop for interest rates on
credit cards. Instead, theyíll take whatever is
offered. But itís easy for debt to build when rates
are higher and when students donít effectively manage
wide range of interest rates can be given on student
friend might qualify for super-low rate of 11 percent or
so on a student credit card, but you might get a rate of
19 percent or 22 percent on some cards.
Citi ThankYou Preferred Card for College Students, for
example, offers a range of rates of 13.99 percent or
18.99 percent or 23.99 percent on purchases depending on
your creditworthiness. Again, those rates will vary with
the prime rate. The card has a 0 percent intro rate on
purchases for seven months from the date of opening the
account. The penalty APR is up to 29.99 percent.
keys to building a strong credit score are to keep
credit card balances low and pay bills on time every
time for a very long time, said Schulz at
CreditCards.com. Experts say itís best to sign up for
mobile alerts to stay on top of when the bills are due,
No. 1 job for anyone with a credit card is to pay your
balance off as soon as you can," Schulz said.