subject: Best College Student Credit Card Offers - 5 Things to Consider [print this page] Best College Student Credit Card Offers - 5 Things to Consider
If you are a college student or are the parent of one, you know how important it is to have the means to pay your monthly expenses like rent, gas, and food - not to mention tuition and books - using cash alone. The convenience of a credit card is undeniable, since it can be used in thousands of locations around school and around town.
Of course, the other major benefit to having a credit card, in addition to convenience, is the ability to borrow money from the issuer on credit (hence the name, of course). As everyone knows, the ability to borrow can be quite nice at times. But, it comes at a hefty price: monthly interest charges.
Interest charges can be completely avoided if you pay down your card's balance at the end of every month. But, most people do not do that. Sure, for a month or two after first getting the new card, it is fairly easy to pay down one's balance completely. But, over time, the balance seems to grow and grow until it is out of control.
If you are looking for the best college student credit card offers, here are 5 things to consider:
1. Credit card issuing companies will use cash-back incentives and cool-looking card designs to get you to join:
Banks and other credit card issuers typically use various marketing incentives like cash-back incentives and attractive-looking credit card designs depicting scenes like a nice tropical beach, the Manhattan skyline, or the Amazon forest. Of course, the cash-back incentives can be helpful, but they are usually small. And if you take advantage of these incentives but fail to pay down your monthly budget, your total interest payments will likely outweigh any benefit you gain from them.
2. "No annual fee" is another common marketing technique:
Another way that credit card marketers who cater to college students will try to appeal to students is through offers like "no annual fee." Unlike cash-back and cool card design gimmicks, this one has some pretty serious teeth in it. Still, don't be fooled: paying a high interest rate on a sizable balance will wipe out any benefit you realize from not paying an annual fee.
Regarding #1 and #2 above, it is best to see through these marketing tactics and instead to focus on #3 (below).
3. Interest rates for college students tend to be very high - often 14% to 22%:
When it comes to selecting the right card for a college student, it all boils down to interest rate. Obviously, the lower the rate the better. But, anything above 8% means some pretty hefty interest payments each month if you run up your balance.
4. College students are notorious for running up their credit card debt:
At this point, everything circles back to one hard, cold fact: most college students - even the most responsible among them - are prone to running up their card balances in very little time. In fact, many student cards become maxed out just months after the student receives the card.
5. Consider the alternative of a prepaid debit card:
What is an excellent alternative to looking for college student credit card offers? The answer: a prepaid debit card. These cards feature the symbols of companies like Visa, Discover, and MasterCard, so you can use them wherever credit cards are accepted. But, because they are prepaid, the user can never have the chance to run the balance up too high. Even better, there is no application process or credit check required: just purchase and use. This is a great way for students and/or their parents to take control of their monthly spending while in college.
Consider these 5 things as you look for a college student credit card. And, consider the alternative of using prepaid debit cards instead.
