Why College Students Should Apply For Student Credit Cards
Published 6/14/08 (Modified 11/22/13)
An Updated List Of the Best Student Credit Card Offers Provided Below
It's remarkable how much the Internet has changed how we manage our finances today, and the sheer amount of information and knowledge it affords us. With a few keystrokes, we are now able to instantly access a wealth of reviews and consumer opinion pieces to better educate ourselves on the workings of all financial products and services. One of the best things to grow out of it is that it's also helped college and university students to become better informed and educated consumers when it comes to dealing with credit cards and the credit application process.
Don't Succumb To Bad Credit Card Offers Just Because Someone Is Giving Away Free Stuff To College Students
Back during my early student years as a college freshman, the Internet was only just getting popular, and many things were still being done the old fashioned way. At the time, my first encounter with credit card temptation was at one of those free credit card promotion booths on campus. I remember walking past the campus student union one day and noticing an attractive girl standing behind a fold out table adorned with a large promotional banner and colorful balloons. On the table was all sorts of prizes - everything from free T-shirts, free Frisbees, cheap alarm clocks, to free squishy ball stress reliever "thingys". Naturally, as a bright eyed and bushy tailed (not to mentioned gullible) young college student, I was ready at a moment's notice to sell my credit card soul and credit score worth for a white 100% cotton, size "L" T-shirt with some credit card promo logo emblazoned on it. For the opportunity to get an instant freebie, I innocently filled out a paper credit card application form on the spur of the moment with my real Social Security Number (yes I know, I was stupid) and real name and address. In exchange, I got my free T-shirt which ultimately was only worn a few times before I got tired of walking around looking like a Visa credit card advertisement billboard. You might want to slap me on the forehead for being so naive back then, but at least I didn't fork over my credit card livelihood for something as silly as a 6 inch long veggie sub sandwich. Compared to the girl who filled out a credit card application in response to a free food offer from Subway (U.S. News article) that she simply couldn't refuse, I look like a genius.
Today, while armies of credit card promotional booths and credit card branded freebies still invade college and university campuses across the United States, the popularity of the Internet is helping to better educate young college and even graduate students about the ins and outs of credit card usage and the wisdom of proper debt management. Back before the Internet, if you didn't seize the opportunity to apply for a particular credit card when the application form was presented to you on campus, you risked missing out on the chance to apply for it later. Pamphlets and flyers you took away from the promotional booths frequently got lost or ended up discarded in the trash can. Credit card companies simply do a terrible job of properly associating credit card applications with sufficient credit card education material. That's why for your own sake as a savvy college or graduate student, if you encounter one of those promo booths on campus, you should resist the free money or free product temptation, and do your online credit card home work first before applying for any offer.
College Students Should Do Their Research At Home And Get Educated Before Applying For A Student Credit Card
At home or at work, there's less pressure to make a rash or uninformed decision, particularly when you're sitting in front of the computer with all that wealth of information before you. Based on my past experience as a credit card carrying college student and also based on my current experience today as a working adult who has mastered the art of carrying around more than one reward credit card, I highly advise all college and graduate students considering student credit cards to thoroughly read through all terms and conditions at home and make their application decisions there. One should never give away confidential financial information or sign up for something as important as a credit card offer by filling out a paper application from some random person on the street or school campus. It's best to research from home, and be patient and thorough as you comparison shop through all credit card offers - there's really no rush. The only one who's in a rush is the credit card company - they want your business. It's okay to make them wait.
Unlike some, I was very fortunate to not end up saddled with out of control unpaid credit card debt. I attribute that favorable outcome to my experience and exposure to credit card usage while I was still a young student. Through trial, error, and self motivated education as a student, I familiarized myself with all the conditions and terminology of credit card use such as annual percentage rate (APR), 0% balance transfers, and payment grace periods. At an early age I learned how to manage my credit card personal finance, practiced how to handle monthly payments on time and learned to avoid finance charges and late payment fees. I firmly believe that exposure to credit cards at an early age under the guidance of parents is the key to future credit use maturity. Avoidance and lack of exposure may help avoid potential credit card debt problems early on, but this lack of opportunity to become educated about the use and risk of credit cards at a younger age when mistakes are less critical can potentially result in bigger credit card debt problems down the road.
Furthermore, taking advantage of student credit card offers while the student is still in college is the ideal way to build credit history at an early age, and help the student become more pro-active rather than reactive when it comes to finances. Waiting until graduation when student credit card options are no longer available may make it more difficult for the credit history-less grad to secure loans, mortgages, or even apply for ordinary consumer credit cards where higher income limits are required. Also, an important and key component of the FICO credit score is the overall age of credit accounts. Thus, the earlier the account is opened and the older it is the better.
Students Need To Understand That While Student Credit Cards Offer Convenient Reward Perks, The Dangers Of Irresponsible Credit Card Use and The Risks Of Debt Mismanagement Are Very Real
One of the most important reasons why college students ought to apply for a student credit card earlier than later is to have a viable means of independently handling unexpected expenses without having to call parents for help every time. College students frequently live far away from home and sometimes there isn't always time for parents to transfer money to their college teen in time. Having a credit card at one's disposal, even if one still uses cash to make the vast majority of purchases is a useful emergency net tool to have. At the very least the student is building a credit history and learning to be independent and self accountable.
Of course, even the relative simplicity of student credit cards may not be suited for every individual. Before applying for a credit card, students need to understand how financially responsible they are. Students who have previously and responsibly borrowed from their parents and paid the loan back, or have shown that they are able to follow a budget and keep track of their spending may be ready to handle the adult responsibility of using a credit card. On the flip side, students who only want a credit card so they have easy access to free money that they can use for frivolous and impulsive buying should avoid credit cards altogether until their college senior year or perhaps or until they've graduated, to avoid the dangers of credit card debt.
For college and graduate students looking to apply for a student credit card or even an ordinary consumer credit card offer, there are certain card features and usage risks they must be very mindful of. While being able to take advantage of cash back credit card rewards, purchase rebates, and being able to handle large emergency expenses on one's own are some of the great benefits to owning a credit card, the reality is that there are serious risks and dangers as well. Be careful of the addictive nature of credit cards and marketing campaigns. Don't apply for a card simply because the program is willing to throw you a one time savings of a few dollars. Think of why you intend to use this particular card offer for the long term.
Inexperience and failure to properly manage one's spending budget and make timely payments in full are a few of the risks. The temptation to use plastic free money is great, particular for college students who often have a spend first, regret later mentality. Students must learn to pay off the entire monthly balance in full every month. Interest fees can be high and it's imperative that students learn how to avoid them at all cost. I highly recommend that new student credit card users learn to manage their credit card finances using online account management and automatic debit payment techniques. They've worked reliably for me over the years.
While some advise against using credit cards to pay off student tuition, I only advise against it if the student is paying for the tuition from his or her own pocket without the financial assistance of parents. Tuition payments tend to be high and without adequate parental promise of help, it's all too easy for the student to spiral into uncontrolled credit card debt. But if the parents are actively helping with tuition payments, using a student credit card to make tuition payments may help the student learn more about the risks and benefits of credit card rebate rewards.
Why College Students Should Apply For A Student Credit Card Instead Of An Ordinary Consumer Card Offer
Student credit cards are specially suited for college and graduate students because they often have lower credit limits to help cardholders better curb and manage their spending habits, and they usually don't demand co-signer requirements for applicants with no credit histories. They also don't impose specific income requirements, which is important for students since they usually don't have much income to speak of. As long as they can prove they are a full time or part time college or graduate school student, they will get the card. Student credit cards are most beneficial during those key college and graduate school years when high credit limits are not as needed, but easy means to generate credit history are sought after.
Some may have questions as to what happens to the student credit card offer once the cardholder graduates from college or graduate school. While most student credit card issuers don't instantly require all cardholders to give up their student credit cards immediately after graduation or once they've lost their student status, cardholders will usually continue to be constrained by student credit card limitations (such as much lower credit limits). Most card issuers offer customers the ability to convert the student card into an ordinary "grown up" card program upon request, but sometimes, the student rewards are uniquely worth keeping. I personally have the Citibank mtVU card that I applied for as a graduate student. While I'm no longer a student anymore, I still keep the card around as-is to take advantage of the lucrative 5% purchase rebate for restaurant related expenses. It's the best of its kind for earning dining out rewards.
After reviewing and evaluating all of the top credit cards for students available, here are the student credit cards I believe are the most appropriate for the novice applicant. They all offer the best deals in terms of airline travel miles, cash back rewards, gas credit card rebate savings, and interest rate terms suitable for student purposes. Check out the following rankings.
List Of The Best Student Credit Card Rewards and Offers:
- Citi Forward® Card for College Students 1 ThankYou® Point for every $1 you spend on purchases. Up to 2 percent Purchase APR reduction, when you make a purchase, stay below your credit limit and pay on time 3 billing periods in a row (0.25% each quarter and maximum of eight times). Earn 100 ThankYou Points each billing period that you pay on time and stay under your credit line up to 1,200 per year.
- Journey Student Rewards Credit Card - Earn 1% cash back on all purchases with no purchase category limitation, plus get a 25% bonus on your cash back each month when you pay your bill on time. There is no limit to the amount of cash back money you can earn and your earnings never expire. Great card for students who want to build credit and get rewarded for it.