Not so long ago, any college student who could sign his name could qualify for a credit card. But the Credit Card Reform Act mandates that applicants be evaluated on their own ability to pay the bill -- meaning they must have income or savings. Issuers can no longer look at overall household income when they consider an application.
Here are seven credit cards that offer good deals -- reasonable rates, generous rewards and no annual fee. All the rates are variable and will increase if the Prime Rate goes up. Each sends e-mail and/or text alerts to remind cardholders to pay on time -- and some include tips to help them develop good money management habits. Some issuers permit cosigners for student credit cards, but before you agree to that, see Kiplinger editor Janet Bodnar’s note of caution.
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Bank of America Student Platinum Plus Visa
Interest rate: 14.24% (variable)
Cosigner permitted? Yes
Web site: Bank of America
Financial education is an important part of this card. It comes with a financial-literacy handbook and an interactive Web site with useful information about building a good credit history, budgeting and identity theft. The card offers access to the bank’s Add It Up program, where cardholders can earn up to 20% cash back on online purchases at participating retailers. Bank of America looks at summer and/or part-time jobs when it evaluates whether a student is creditworthy. The card comes with a 14.24% interest rate, and the average credit limit is a little over $1,000.
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Capital One Journey Student Rewards
Interest rate: 19.8%
Cosigner permitted? No
Web site: Capital One
This card offers 1% cash back on all purchases plus a 25% bonus on the amount you earn each month that you pay on time. You can earn an extra 15% cash back for purchases on Capital One’s Perk Central network. The interest rate is a steep 19.8%, and students generally receive only a $300 to $500 credit limit. Students are eligible for a credit increase after six months of paying on time and staying under their credit limit.
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Citi Dividend Platinum Select Visa Card for College Students
Interest rate: 12.99% to 20.99%
Cosigner permitted? No
Web site: Citi
Students can earn 5% cash back on purchases at supermarkets, drugstores, gas stations and utilities for the first six months. They earn 2%, on a rotating basis, for spending at department stores, hotels and restaurants, and other categories, and 1% on everything else. Shop at retailers that participate in the Citi Bonus Cash Center and you earn an average 5% cash back with no cap. After a seven-month 0% introductory rate, interest rates range from 12.99% to 20.99%, depending on creditworthiness.
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Citi Forward
Interest rate: 12.99% to 21.99%
Cosigner permitted? No
Web site: Citi
This card rewards students for good financial behavior. Pay on time and stay under the credit limit three months in a row and your interest rate (0% introductory rate for seven months, then 12.99% to 21.99%, depending on creditworthiness) drops 0.25 percentage point. You can reduce your rate as much as two percentage points overall. You earn five ThankYou points for every dollar spent at restaurants and on books and music, and one point for all other spending. You get an extra 100 points each month for paying on time and staying under the credit limit. ThankYou points can be used for travel, statement credits, gift certificates or merchandise.
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Discover Student More
Interest rate: 12.99% to 19.99%
Cosigner permitted? Yes
Web site: Discover
Discover offers a 5% cash-back bonus in categories, such as restaurants, travel and groceries, that change quarterly and up to 1% on everything else. Shop at the online mall and earn a 5% to 20% cash-back bonus. The interest rate ranges from 12.99% to 19.99% after a six-month 0% introductory rate, and the average credit limit is $1,000.
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Discover Student Open Road
Interest rate: 12.99% to 19.99%
Cosigner permitted? Yes
Web site: Discover
Students with cars on campus might like this card. You receive 2% cash back on up to $250 a month spent at gas stations and restaurants. On everything else, you get 0.25% back on up to $3,000, then 1% back. After a six-month 0% introductory rate, the interest rate is 12.99% to 19.99%, depending on your credit history. You can receive your reward as a gift card, merchandise or cash, or donate it to charity. The average credit limit is $1,000.
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Target Red Card
Interest Rate: 22.90%
Cosigner Permitted? No
Web site: Target
If you\'re going to apply for a retail credit card, register at a store you frequent rather than one you visit occasionally just to purchase big-ticket items, says Linda Leitz, a financial planner based in Colorado Springs, Colo.
Applying for a retail card at a mass chain such as Target, which sells everything from groceries to clothes to laptops, may be a smart option for a 20-something looking to further build their credit history. The card allows you to get free shipping on online purchases. When you use it to fill five prescriptions at a Target pharmacy, you’ll get a rewards certificate for 5% off your next purchase, in addition to the 5% discount you get on all Target purchases as a cardholder. Keep in mind, however, that you’re only able to use the card at Target stores.
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More From Kiplinger
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There's not a one-size-fits-all solution for the number of credit cards a person should own. However, it's generally a good idea to have two or three active credit card accounts, in addition to other types of credit such as student loans, an auto loan or a mortgage.
How old do I have to be to apply for a student credit card? You need to be at least 18 to apply for a student credit card and meet the income requirements for your age, but there's no credit score required to apply for a Discover student credit card.
UNiDAYS is the OG of student discount cards. It's widely popular as it's a free student discount card that offers both online and in-person discounts. No need to faff around with a plastic card, UNiDAYS has an app you can use.
The Discover it® Secured Credit Card — offering cash back rewards on every purchase — is the best beginner credit card. It's a secured credit card widely available to consumers with fair, poor or limited credit. Find your perfect card in 30 seconds. Check your approval odds so you can shop smarter.
Key takeaways: Closing a credit card can hurt your scores because it lowers your available credit and can lead to a higher credit utilization, meaning the gap between your spending and the amount of credit you can borrow narrows. Canceling a card can also decrease the average age of your accounts.
To prepare, you might want to have at least three cards: two that you carry with you and one that you store in a safe place at home. This way, you should always have at least one card that you can use. Because of possibilities like these, it's a good idea to have at least two or three credit cards.
There are some differences around how the various data elements on a credit report factor into the score calculations. Although credit scoring models vary, generally, credit scores from 660 to 724 are considered good; 725 to 759 are considered very good; and 760 and up are considered excellent.
If you are under the age of 21, you may be required to find an adult, typically a parent or guardian, who's willing to co-sign your application. Creditors use the co-signer's credit history to approve the student account. The co-signer then acts as additional insurance for the card.
Getting a student credit card can be one of the best ways to build your credit. For example, unlike student loans, if you manage your credit card right by paying it off in full each month, you won't ever have to pay any interest. It's a free way to build your credit.
Introduction: My name is Tish Haag, I am a excited, delightful, curious, beautiful, agreeable, enchanting, fancy person who loves writing and wants to share my knowledge and understanding with you.
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