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It’s back to school time, but before you pack up your stuff and head off to college for the first time, it might be a good idea to get set up with a credit card first. Applying for your first credit card can be daunting, so we’ve put together a little guide on what to look for when credit card shopping.
Students searching for a credit card should be using different criteria than adults looking for credit cards. Why? For starters, there are different rules surrounding credit cards when it comes to anyone under the age of 21. Second, you have different needs when you are first starting out on your own than you will when you have established your financial life. Here are a few things to look out for if you are a student in need of a credit card.
Ability to qualify: If this is your first credit card, your credit is probably not in the “excellent” range, so you should be looking for a credit card that only requires “average” credit. If you end up applying for a bunch of credit cards outside of your qualifying credit, it can actually drag your credit score down even farther. If you don’t know what your credit score is, sign up for a free credit report monitoring service. If your credit score is not where you need it to be, you can check out a credit repair company to help you raise your score. Here are some highly-rated credit repair agencies that can help.
Most student credit cards only require average credit, although there are a few standard cards that will also accept average credit. Also, if you are under 21, you will either need a parent to co-sign on your credit card or you will need to prove a steady source of income in order to qualify.
No/few fees: Look for a card with the least amount of fees as possible. A card with no annual fee is preferred, so you are not paying extra on the card every year. Also, look for a card that has low late fees and overlimit fees, since this is your first card and you are bound to make a few mistakes.
Low APR: Since you might not be able to pay off your balance each month, it is also a good idea to look for a card with a low APR, since this determines how much interest you will be paying for the balance you are carrying on your card. A few student cards even have an introductory 0% APR for up to 6 months, which is a good option for a college student to have.
Rewards: Very few student cards offer rewards like cash back or travel points, but if you can qualify for the few that do, it is a good feature to have. You get up to 5% cash back for every dollar you spend, and if you are putting things like tuition or books on your card, those points could add up fast.
Be sure to have a list of good questions to ask before getting a credit card and you will be prepared to begin building credit.