Student credit cards (SCC’s) are for those students currently attending a university or college. They are specifically targeted at students who may have little or no credit history. Their purpose is to develop a good credit line early on in the student’s career and life.
The difference between a student credit card and a regular credit card application is the student’s ability to repay the incurred debt, plus the fact that most beginning college students are 18 years of age, and under the 21 year old “legal age” limit. The SCC, in conjunction with the Credit Card Act of 2009, helps facilitate the student establishing a good credit line history.
The main impact of the Credit Card ACT is to limit the increase in credit card interest rates. Some credit card issuers would increase the interest rate on existing card balances. A consumer may get a reduction in their interest payments after six months of paying their bills on time.
A college student shopping for a student credit card should compare the different services before applying. The interest rates and various fees can differ sharply. Let’s look at some examples.
Citi Dividend Platinum Select does not need a cosigner. However, like most credit cards, good credit is needed. The APR (annual percentage rate) is 13.99-21.99% variable. They offer various “Cash Back” options on purchases.
The Journey Student Rewards from Capitol One only requires a “fair” credit rating. Regular APR is 19.8% (variable), and there is no annual fee. This is a card designed to build good credit, and they offer free, customizable email text alerts.
If the student has excellent credit, they can apply for the Discover Student Cardbuilder, where they are the boss! There is no annual fee, and the student picks the regular and/or introduction APR. There is an interactive tool to allow the student to customize this student credit card.
For students who do a lot of traveling, there is the Discover Student Open Road Card, which offers a Double Cash Back bonus at any gas station or restaurant. There are no annual fees and the regular APR is 13.99-20.99% (variable).
Good credit students may wish to apply for the Citi mtvU Platinum Select Visa Card for College Students. No cosigner is required, and the student can earn “Thank You Points” for every dollar spent at places like movie theaters, video rental stores, restaurants, bookstores, and record stores.
The Citi Forward Card offers an annual percentage rate reduction on purchases if the student uses their credit wisely. There are no balance transfer fees, and APR is 13.99-22.99%.
A prospective student who wants to obtain a credit card must generally get a cosigner. That is because they have no proof of the ability to repay a loan. This applies to consumers who are younger than 21 and are not authorized users on their parent’s credit card account. Federal law prohibits credit card companies from offering “freebies” anywhere within 1000 feet of a campus border.
For those with bad credit, there is Capitol One Secured MasterCard, only requiring a refundable security deposit. The annual fee is $29.00, and regular APR is 22.9%. Another option for those with bad credit is the First Premier Bank Classic Credit Card, which requires a regular checking account. A refundable $95 gets $300 credit limit. This would be a good starter student credit card.
Check out the various credit card review websites and fill out their interactive forms to get the perfect match for your individual financial situation. Whether you have bad, fair, good, or excellent credit rating, somewhere there is the perfect student credit card to start you on your path of establishing a good credit card rating.