Money Blue Book

Updated List Of The Best Credit Cards For College Students and Graduates To Learn Credit Responsibility

If you are a college or graduate student, it’s important to understand that proper credit card management is a trait and skill that should be developed sooner than later in life. If you are the parent of a teenage child who is currently a college student, it’s very important to teach him or her the importance of building up a good credit history while he or she is still in school, before entering the real working world where credit card mistakes and shortcomings are more brutal. The FICO credit score is heavily dependent on the length and quality of each person’s long term credit history, so it’s in the student’s best interest to develop good credit usage habits and responsible management skills early on. Avoiding credit altogether out of fear or mistrust of credit cards is a misguided approach in my opinion. How else will a student develop the financial management skills he or she will need to succeed in this technologically and financially driven world?

Knowledge and Education Is Power, So If You Are A Parent, Be Sure To Teach Your Student Or Teen Financial Responsibility Early and Often

Many parents today are afraid of giving their college age teen the huge financial responsibility of using a credit card. But shielding them away from this altogether may hurt them in the future due to their lack of exposure to basic finance skills and their lack of credit history. They may be at a disadvantage if and when they choose to purchase a home or a car on their own. Of course not all credit cards are suitable for students, teens, and credit novices, but with the right student credit card, it can be an invaluable financial teaching tool. Here are some ways and ideas to help your college age child or teenage student better understand the financial basics of using a student credit card:

1. Keep the initial credit limit under $500 - It’s best not to give the student too high of a credit limit initially to discourage overeager spending or purchases beyond their means or needs.
2. Teach them to make timely online payments - This is the internet age we are in so students need to know how to timely pay off their credit card balance online. Setting up automatic debit payments is a convenient option as well.
3. Set rules on what they can use the credit card for - Students need to learn to discern what they should buy and what they should not. They need to know the rules of responsible spending.
4. Make sure they know that they must pay off the balance in full each month - New credit card holders may initially have statement shock, having no experience at knowing how high their accumulated monthly statement balance may be each month. The student needs to learn how to mentally keep tracking of his or her spending and know the importance of paying the statement balance off regularly.
5. Teach and explain credit terms such as finance charges, fees, annual percentage rates, and grace periods.
6. Show the student how to track their cash back earned and reward points so they learn the benefits of reward credit cards and understand why responsible use can help one maximize overall financial potential. The key phrase here is “responsible use”.

Most of the uniquely designed student credit cards out there may be advertised and promoted as for college students only, but usually any type of student can qualify for them, including those attending graduate school. Frequently, the card application will request some form of student status identification, such as a copy of your tuition bill, student ID card, or simply a signed affirmation that you are indeed a student.

The ideal college and graduate student credit card will contain No Annual Fee, a 0% Annual Percentage Yield (APY) introductory purchase or balance transfer period to offer the student a trial usage period, and cash back rewards or other usage incentives to teach them the benefits and rewarding aspects of responsible credit card use. Pursuant to these characteristics, none of the following suggested student credit card offers below have minimum income or co-signer requirements either - ideal for college students or recent graduates who usually have minimal income information to offer anyway. Of course, make sure you can afford what you buy with your newly applied for credit cards. Be smart, pay off your monthly balances, and don’t fall into the trap of unpaid credit card debt.

Here Are The Student Credit Cards Determined To Be the Best and Most Appropriate For College and Graduate Students:

1. Citi mtvU Platinum Visa for College Students - Earn 5% back for purchases made at restaurants, coffee shops, bookstores, music stores, movie theaters, and video rentals. 1% back for everything else. 6 month 0% APR introductory period for all purchases, balance transfers, and cash advances.
2. Citi Dividend Platinum Select Visa for College Students - Earn 5% cash back for purchases made at grocery stores, gas stations, convenience stores, and utilities for 6 months and then 2% back thereafter. Earn 1% cash back for everything else. 6 month 0% APR introductory period for all purchases, balance transfers, and cash advances.
3. Citi Driver’s Edge Visa for College Students - Earn 3% back for purchases made at grocery stores, gas stations, and drug stores. Earn 1% rebate for everything else. Get rebates for the miles you drive (excellent way to earn lots of rebates if you drive a lot). 6 month 0% APR introductory period for all purchases, balance transfers, and cash advances.
4. Citi Platinum Select for Students - Get an introductory 0% interest rate for all purchases, balance transfers, and cash advances for 6 months (with no balance transfer fee pursuant to this offer). This card also has a photo card option that allows you to post your own self photo onto the plastic face. Students also get special student only discounts via the Citi student website.
5. Discover Student Card - Earn 5% unlimited cash back in popular categories that rotate quarterly in categories such as gas stations, restaurants, clothing stores, and travel. Earn 1% for everything else. 6 month 0% introductory APR on all purchases.
6. Discover Open Road Card For Students - Earn 5% cash back on gas and auto repair purchases. Both of these are pricey expenses so the high reward earning percentage is sure to result in some nice cash back savings in the long run. The cash rebates never expire and there is no limit to the amount you can earn. There is also a 0% APR purchase offer for 6 months.
7. Capital One No Hassle Cash Rewards For Students - Earn 1% cash back on all purchases with no purchase category restriction. You’ll also earn an annual bonus of 25% on the cash back rewards you earn for the year. There is no limit to the amount of cash back money you can earn and your cash rebate rewards will never expire. Currently the card is also running a 0% APR promo offer until December 2008.

This entry was posted on Sunday, December 9th, 2007 at 3:00 pm and is filed under Credit Cards, Deals and Offers, Financial Planning. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.