Readers: This is article 6 of 25 from my no-nonsense “Credit Card Basics” quick-reference series.
For younger people who are just getting started in life, a student credit card is a terrific way to help establish a positive credit history. The most important consideration in choosing the best one for you depends on how you plan to use it. For example:
If you intend to pay the bill off every month, then focus of getting a card with:
- The longest possible grace period
- No annual fees
- Multiple reward options and simple redemption rules
If you may not be able to pay off the bill every month, then look for a card with:
- The lowest-possible interest rate
Then, don’t forget to:
Pay attention to the interest rate! While it’s not hard to find student cards offering teaser rates of 0%, it’s the interest rate after the introductory period ends that’s important. Try to keep the APR no higher than 18%.
Look for good behavior rewards! Believe it or not, there are cards that offer points for holders who maintain a good GPA and pay their bill on time.
Read the fine print! Cards that offer expensive gifts in exchange for signing on the dotted line often trap students into dubious agreements sprinkled with onerous fees and nasty minimum balance requirements. So be careful.
Photo Credit: GotCredit