Student Credit Card Comparison
Credit cards have their benefits, but they also have their risks. In fact, there’s actually a bill in congress that attempts to address the issue. The College Literacy in Finance and Economics (LIFE) Act found that in 2004, the majority of students, 56 percent, carried an average balance of $2,000. They also found that 1 in 10 students who graduated with a bachelor’s degree in 2008 did so with at least $40,000 in debt. The bill wants to education college students on basic financial principles in an effort to hopefully end this trend. When you get your first card, it can be very enticing to splurge on items when all you have to do is swipe, but if you don’t become financially responsible soon, it could be very damaging in the long-run. If you’re interested in building good credit by paying on time and not going over your limit, there are plenty of student dedicated cards that offer rewards just for being responsible. Here are a few that I compare.
Citi Forward Student Card
APR: 0% APR for first 7 months then 13.99% – 22.99%
The Citi Forward Card allows you to earn 5 rewards points at places college students usually spend the most – restaurants, books , music, movie theaters and video rentals – with one point for every dollar spent elsewhere. You can earn up to 75,000 points in a year. And you gain an extra 100 points by paying the minimum balance or more on your bill on time (a minimum balance is required to be eligible for this award). The bonus 100 is not included in the 75,000 point limit so as long as you pay at least the minimum each billing cycle, you could earn up to 12,000 extra points in a year. Another huge plus is that there’s no annual fee.
Here are a few of the awards and how many points you’ll need to earn:
Laptops can range from 40k to over 100k points. A Dell 14″ Inspiron Laptop with 6GB Memory, 500GB hard drive is worth 65,400 points. You can earn that amount within a year as long as your account is open and current. Other items include CDs, books, sporting equipment and discounts for travel expenses like flights, hotels and travel packages.
Capital One Student Credit Card
The Journey Student Rewards Card from Capital One runs their rewards program slightly different. You get one percent cash back on everything you spend plus another 25% on the total cash back you’ve earned during the month. So if you spend $500 in a month, you get 5 bucks. As long as you pay your bill on time, you’ll get a bonus 25% on that five dollars earning you an extra $1.25. Total amount you get after spending half a grand is $6.25. Spend this amount for a year and you get $75. Compared to a free laptop, that’s not that much. So even though there’s no annual fee, which is always preferred, I’d still try applying with Citi first.
Discover Student Card
APR: 0% for first 9 months then 12.99% – 18.99%
They run a cash back program like Capital One, but it’s a bit more generous. The Discover Student Card offers 5% cash back on categories that change every so often. For instance, between January and March, you could’ve received 5% cash back on gas and entertainment. April through June will earn you cash back on restaurants and movies. They have a little calendar so you’ll know which items are earning the 5% cash back bonus. Everything else will receive a 1% cash back. They also have an exclusive online store where card members can earn 5% – 20% cash back on items. Some of the brands available to shop through Discover’s online store include Dell, Macy’s, Apple Store and Circuit City.
Other helpful sites
Building good credit is important if you want a low interest rate on an auto or home loan. FiscalGeek does a good job breaking down how your credit score is determined and how much interest you can expect to pay on a mortgage (when that time comes). And Nerdwallet allows you to compare credit cards and offers tons of advice and tips via their blog (there preferred card is Citi Forward).
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