Best Credit Cards For College Students

A college student credit card is a great way to earn rewards and build your credit. It’s best to start as early as possible building your credit if you plan on larger purchases in the future such as buying a home or purchasing a car. Mortgage lenders and auto loan providers require that you have steady income and good credit history. They also look at the length of your credit history as well as any late payments you may have had. This is why it’s best to start building credit early and paying off the credit card each month. Some banks won’t even lend to college students but others are open into giving college students a small amount of credit hoping they will become long standing customers over time.

What card is the right one for me?

Finding a student credit card that fits your unique needs can be a bit overwhelming once you start doing research and looking at the hundreds of cards available. The toughest part is picking the right card for you. Banks offer all kinds of credit cards to students with no credit history. Some cards offer 0% interest for certain periods of time as well as no penalties for late payments while others make you pay an annual fee. There are also great rewards cards that offer cash back for every purchase you make. If you have no previous credit history, some banks will only let you have a secured credit card, which means you put a refundable deposit in your account. The banks is taking a risk allowing you to have a credit card in the first place, so they are requiring this deposit to see how responsible you are.

What’s the catch?

The catch here is that it takes a disciplined person to get a credit card and use it properly to build your credit. If you can use your credit card responsibly and pay it on time each month without maxing out your credit, then you will have no problem building a good credit score so you can secure the purchase of your first home.

Now let’s look at the best credit cards for college students

We have all the basics out of the way so lets take a look at the best credit cards for college students with no credit history:

  1. Discover it® Student Cash Back Credit Card
    1. The Discover it® Student Cash Back credit card has an amazing introductory offer that we think gets the top placement. All the cash back that you have earned at the end of the first year, Discover will match ALL of it. No questions asked. No ifs, ands or buts. You don’t have to sign up to participate, it automatically happens at the end of your first year. Also, there is no limit to the amount you get back. It’s hard to match that offer 😉
  2. Discover it® Student chrome Credit Card
    1. Much like it’s sibling above, the Discover it® Student chrome credit card has the same match guarantee as the Student Cash Back card from Discover. They will match all the cash back from the previous 12 months and give it back to you. No need to sign up and there’s no limit to the amount matched back.
  3. Journey® Student Rewards from Capital One® Credit Card
  4. Citi ThankYou® Preferred Card for College Students Credit Card
  5. Bank of America® Travel Rewards Credit Card for Students
  6. Wells Fargo Cash Back College Card

Factors to consider

Now that we have presented you with a list of cards to choose from, lets discuss more of what you should look for in a credit card. Keep in mind you are just a college student and your needs differ from someone who travels more frequently for work to build airline miles. Once you have credit established and you are out of college, you can look into other credit card options.

  1. Annual card fees: Some cards have annual fees and others don’t. What this means is that just for having the credit card and keeping it active, you must pay the annual fee. This is just another way the credit card companies capitalize on you. We recommend you find cards with no annual fee. However, if you find a card that suits you and it does have an annual fee, just make a note on your calendar of when it will be due 12 months from now so you can be prepared to pay the additional cost.
  2. Sign up bonuses: The majority of the cards above offer some type of sign up bonus. To earn that bonus, you must spend a certain amount of money within the allotted time frame, usually 3 months or so. They use the sign up bonus to entice you to get their credit card in hopes that you’ll sign up.
  3. Rewards: Besides gaining a credit history, the other main reason to get a card is the awesome rewards! Make sure to find a card that offers cash back rewards on purchases that you make. To get the most out of your card, use it to buy your groceries and gas and everyday purchases, BUT make sure you pay it off as soon as you can. This is where the discipline comes in. If you are responsible with your credit card, you can gain some valuable rewards and cash back.

What Are We Going to Do About Student Debt?

If you haven’t heard, President Obama recently signed an executive order that expands eligibility for the Pay As You Earn program. The program was created to cap monthly debt payments of eligible borrowers to no more than their monthly income. If you have outstanding debt after 20 years, or 10 years if you work for a nonprofit or in the public sector, your debt will be forgiven.

student debt

The program is great for those who are up to their ears in student debt, though it’s also a frightening thought that you may still be in that debt 20 years from now.

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More College Graduates are Filing Bankruptcy Now than Ever Before

Students go to college to learn more about the world around them, learn a trade or profession, and the end goal is to get a job that will allow them to pay the bills.

Unfortunately, with the job market in such a dismal state, this is not the reality that is awaiting many recent college graduates. Instead, they are graduating with more debt than ever before and, without a job to help them pay off their debts, many students are now seeking protection from their outstanding debts by declaring bankruptcy.

According to a survey released by the Institute for Financial Literacy, the percent of college graduates who have earned a bachelor’s degree and owe some sort of debt has increased from 11.2 percent in 2006 to 13.6 percent last year. Interestingly enough, the percentage of those who have not finished college or who only have a high school diploma and are in debt has decreased.

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Credit Cards Hold Risky Future Implications for Students

Empty pockets are a common problem college students face. The financial demands of housing, books, tuition, transportation and living expenses are challenging enough. Forget about having extra money for movies, eating out, clothes, vacations and other money gobbling activities that college students wish they had the cash for.

Credit card companies know this best, and that’s why they target students with “too good to pass up” deals. It may seem like a great deal to score a free meal at the local sandwich shop just for filling out a credit card application, but the implications of credit cards for college students are not worth the free lunch.

Go to any neighborhood surrounding a college campus and chances are you’ll see tables stacked with credit card applications offering free food, books, gift cards, etc. Card companies know that the future implications of credit card debt may not be the foremost thought to a hungry, broke student when the opportunity for free stuff presents its self. The result creates a naïve credit-card yielding college student with a free sandwich.

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StraighterLine Offers Cheap Alternatives to Freshmen Level Classes

straighterlineThe average college student graduates with $24,000 in debt. This can be attributed to the fact that the average college tuition has increased by at least 5.6 percent in the past ten years.

So, what’s the average, broke college student to do? Should you sell all of your worldly possessions so you can take Intro to Biochemistry? Heck no! How about using StraighterLine?

StraighterLine is a complete online “school” that offers a cheap alternative for introductory level classes. StraighterLine allows students to pay under $1,000 for an entire year’s worth of classes. These “101”-level classes offer the same information as traditional freshmen-level classes at many universities, but they eliminate the costs of running a college. Read the rest of this entry »

College Students are Graduating with Even More Debt

student loansThe cost of earning a college education has been a concern for many families for years. A new report reveals that this concern should be increasing because the average amount of debt that a student graduates with has also been increasing.

According to the New York Times, the Project on Student Debt reports that the average college senior graduated in 2009 with $24,000 in debt. This is up six percent from 2008.

The unemployment rate for recent college graduates has also increased since 2008. It is now 8.7 percent, which is the highest annual rate on record. Read the rest of this entry »

Is Student Loan Consolidation Right For You?

student-loansSix months after you graduate, those lenders are going to want their money, and that means you may have to manage some serious debt.

I’m up to my eyeballs in it and considering consolidation. It may sound like a scary word for you new borrowers out there, but, like it or not, loan consolidation may be necessary if you’re having a hard time keeping up with your student loan payments. But keep in mind, it’s not right for everybody.

Here are five points you must consider before choosing student loan consolidation.

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Student Debt – Who is to Blame?

478790_loan_applicationCollege Board® recently found in a recent study that the average student debt from a private school for bachelor’s degree was around $22,380.

In another study, according to the research and advocacy organization Project on Student Debt, in Oakland, California, 10 percent of 2007 and 2008 graduates had accumulated over $40,000 worth of student loan debt. They gathered this data per calculated Federal statistics.

While the students are burdened with the debt, in my opinion, the responsibility also falls upon the financial loan providers and the colleges who connect the students with their loan sharks.

In reality though, prestigious universities are not likely to discourage student loans to afford their hefty tuition rates.

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Woman Owes $555k in Student Loans

spiraling staircaseWhile it’s not morally right to feel better because of another’s misfortune, this story may have students across the country feel just a bit better about the amount of money they will owe in student loans upon graduation.

According to the Wall Street Journal, Michelle Bisutti, a 41-year-old woman from Columbus, Ohio borrowed $250,000 to pay for medical school in 1999. The debt has since increased to $555,000.

Part of the spiraling effect is the result of her deferring loan payments while she completed her residency, default charges and relentlessly compounding interest rates, according to the Wall Street Journal. While in school, her loans accumulated interest with variable rates ranging from 3 percent to 11 percent.

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Economy Extends College Career by Two Years

presitigous schoolMost people think that when students are applying to colleges, they are looking for the most prestigious school; students must want to go to the school that offers the best degrees for their fields. However, this isn’t really the case.

A new study by Public Agenda said that students are more concerned with how much an education will end up costing them than with the prestige associated with each school.

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