Posts tagged: student_credit_cards

Student Credit Cards. Your Millions Start Here.

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As members of the under 30 crowd one of the biggest topics we talk about is credit and debt. Our parents are, for the most part, baby boomers. Unfortunately that mean they are, for the most part, broke and up to their eyeballs in debt. That’s not a true statement in every case, but it’s the reality for a scary percentage of the over-50 set. A couple of years ago I read that only 1 out of 50 baby boomers are financially ready for a comfortable retirement. Yikes. I guess we better start making some serious money or our parents are going to be in a world of hurt.

Lots of people want to point the finger of blame at the credit card industry as America’s financial downfall. I agree they’re giving us the gun, but we’re the ones pointing it at our own foot and pulling the trigger not once, but several times (For insight into that analogy, google ‘bankruptcy statistics’. You’ll see what I mean.).

Young people should be establishing credit for themselves. Credit is a tool, nothing more. If we’re dumb we’ll use it poorly; if we’re smart we’ll use it to get rich. It’s that simple. If our club-wielding ancestors had given up on fire after they burned themselves the first time, where would we be?

I’ve heard a rumor that Bill Gates started Microsoft with his credit cards. True? I have no idea, but it makes for a good story. I do have a friend whose website made $100,000 in one month thanks to the advertising he was able to do with his credit cards. Without them he would only have been able to accomplish a tiny fraction of that success.

What does this mean for the rest of us? It means we have a few choices: 1) we can buy into the advertising and use our credit cards to buy lots of thing we can’t afford and don’t need, putting ourselves into a hole from which we may never emerge, 2) we can hide our heads in the sand with statements like “I don’t believe in credit cards.” or 3) we can educate ourselves, develop self-restraint, and use credit as a vehicle to help us get to our financial goals a lot more quickly.

Door #1 leads to great friendships with bankruptcy lawyers. Door #2 leads to, well, it leads to being very bored, but probably sleeping well at night. Door #3 probably leads to a few mistakes, but eventually it leads to financial independence.

Here’s how to avoid Door #1 while you’re in college. Open a couple of student credit cards, but keep the limits low. If you’re going to screw up and spend all the way to your limit a couple times, better to do it with a $500 limit and not a $5000 limit right?

Also, get in the habit of paying the balance every single month. If your credit card offers a program where they’ll pay your bill out of your checking account, use it! Anytime human beings can automate good habits into our lives we definitely should. If they don’t offer that program, your bank probably offers something similar through your online bill payer. Use it!

If you’ll get in the habit of paying your bill monthly you set yourself up to use your credit cards intelligently for the rest of your life. I love credit cards. I believe that, used with care, they are the best financial tool in the world today.

Credit Unions That Offer Visa Credit Cards to Students

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First of all you should probably understand what a credit union is. Credit unions are what is known as a ‘co-op’ or cooperative. What does that mean? A cooperative is a business or organization owned by its members, as opposed to being owned by an individual or corporation. The single biggest difference between credit unions and banks is that banks are run for profit.

Other than being a non-profit entity, credit unions run pretty much the same way as banks. They offer checking and savings accounts, investments, mortgages and other types of debt tools -including credit cards.

Lots of people seem to prefer dealing with credit unions as opposed to banks, and a lot of students are looking to get credit cards from credit unions. The question is whether they can find any. The answer is, of course, yes.

Before I get into what credit cards a student could get through a credit union, let me explain a little about why people would rather belong to a credit union than a bank.

Credit Unions are dedicated to a philosophy of service to the members. Over 60 years ago the philosophy was outlined in the ‘Seven Cooperative Principles of Credit Unions’. Here they are:

  1. Voluntary Membership. Any person willing to accept the responsibilities of membership can become a member.
  2. Democratic Member Control. One member, one vote. Credit unions are owned and controlled by the membership.
  3. Members’ Economic Participation. Members make the decisions about the financial choices of the institution.
  4. Autonomy and Independence. Membership makes decisions about decisions that affect the co-op as a whole.
  5. Education Training and Information. Credit Unions want their membership to be well informed about what it means to be a member.
  6. Cooperation Among Cooperatives. Credit Unions seek to work in unison with other cooperatives, especially other credit unions.
  7. Concern for Community. Credit Unions were formed for the benefit and strengthening of communities in their financial lives.

Basically, credit unions are by the people and for the people. Seeing these seven governing principles you realize why credit unions are able to charge lower fees and interest rates on all their financial tools – they’re established and maintained by the people paying those fees and interest rates.

Here are a few examples of Credit Unions Offering Student Credit Cards:

  • The Student Credit Union Alternatives Visa Credit Card.
  • Fort Belvoir Federal Credit Union Student Visa Credit Card.
  • University of Wisconsin Student Visa Credit Card.
  • State Employees Credit Union (Maryland) Student Visa Credit Card.
  • Missouri Student Federal Credit Union Student Visa Credit Card.

There are a lot of government organizations and most universities will have a credit union. Any one of them should be able to help you get the student credit card that will get you on track to building credit history and raising your credit score.

Low Interest Student Credit Cards

What are the two fundmental principles of Investing 101? Risk and reward. If you’re going to put money into an investment, you have to take the potential risk and the potential reward of the investment. The riskier the investment, the higher the potential reward has to be.

Does this have anything to do with credit cards and interest rates? Of course it does. I want you to find low interest student credit cards, but I want you to understand why it’s not that simple.

Every time a credit card company extends a person a line of credit they’re factoring in the potential risk and the potential reward. You might think credit cards charge high interest rates on most student credit cards because they just want to soak the students for all their worth, but it has more to do with how likely students are to pay their credit card balances.

Interest rates are high on certain types of credit cards for one reason: the people that have been issued that type of card are more likely to flake on their payments, whether that means they pay late or they don’t pay at all. Students are a high risk demographic for credit card companies. According to the standard measurment tools (the credit bureaus), a college student is someone doesn’t have a proven track record of using their credit cards and then paying their balances. They just haven’t had access to credit cards for long enough to prove they’re a safe investment.

The reality is there are a lot of people who just can’t handle credit. They treat it like free money that won’t have to be repaid. They pay late or they don’t pay at all and the credit card company gets stuck with the bill. Most college students represent an ‘unknown quantity’ to the credit providers. Maybe they’ll behave themselves with a credit card, and maybe they won’t. Only a credit history can prove it, and college students haven’t had time to build one.

College students can get higher rate cards and use them consistently as a way of proving their credit worthiness. It may even be in their best interest to carry a small balance on the card and pay it down over time. Yeah, you pay some interest, but just look at it as the cost of doing business. If you can show the credit bureaus you’re trustworthy you’ll be able to get high limit, low interest credit cards down the road that you can use for good purposes like running a business or buying advertising.

All that being said, you may be able to find a student credit card with an interest rate between 8% and 12%. Not bad for a first timer.

Either way, if you pay your dues, you’ll get the best credit cards later.

International Student Credit Cards

For a lot of foreigners, the Amercian Dream begins with college. More and more universities are accepting foreign applicants to improve the diversity of their campuses, and like it said in Field of Dreams, “If you accept foreign students, they will come in droves.” I think that’s what it said anyway, or something very similar.

So what is life like for a college student freshly arrived from Canada, China, India, or Europe? They have to get used to a new culture, a new currency, a different language (although most of them probably come to this country with a working knowledge of English), and they have to get accustomed to the business and financial practices of the United States. Depending on their country of origin, the way our financial systems work may be completely different.

And what is it that makes our financial world go around? Two things: savings tools and financing tools. This blog doesn’t deal much with the investing side of money, so let’s talk about how a foreign student can break into the world of American debt. The way for them to get started is with international student credit cards.

It’s not going to be easy for most international students to get credit cards. First of all, they will come to the country with no credit history or credit score in the eyes of the American credit bureaus. That makes them a big risk in the eyes of any credit card provider.

Since most foreign students will be viewed as a risky client for the credit card companies, the best way to go may be with either a prepaid or a secured credit card.

My preference would be for the student to get a secured credit card, because the provider of that card is more likely to report consistent use and payments of the credit card to the credit bureaus. After several months or a year of positive reports the foreign student will start to establish the credit score and history they need to get better credit cards (as in higher limit and lower interest rate).

Here are a couple credit cards I found that are available to international students:

American Express Blue Credit Card for Students – many international students have been able to establish their first unsecured credit card with American Express. It offers some great benefits as well, with discounts on airfare, no annual fee, and a couple of hours of free long distance phone calls. And don’t forget the snob factor of owning an Amex.

Chase Platinum Credit Card for Students – Chase seems to approve a relatively high percentage of first time foreign applicants. Also, Chase won’t charge you an annual fee if you get this card and they’ll provide fraud protection on the card as well.  You even get to choose from four designs.

Canadian Student Credit Cards

Student credit cards in Canada are different from what you might find in America if you are a student going north of the border. There are some common traits that you will have to have whether you are in Canada or America. It is important that you establish good credit. The best thing you can do is build your credit. If you have none then there are some things that you can do to improve your situation.

First of all you can open a saving account and a checking account before you apply for student credit cards. These are great ways to get the ball rolling. This isn’t going to solve everything, but it will help start off on a good note. You can start paying your bills in college such as rent and utilities on this fund. This will allow for credit bureaus to see that you are good on paying your bills. Then it is good if you can get a store credit card from a clothing outlet that will allow you to build more value with credit bureaus. This is all in vain if you don’t pay your bills on time. That is the biggest thing you can do.

For Canadian students to get a credit card it will probably require an annual fee of some kind. The limits are usually around $750 and the interest rates are similar to those of American credit cards. They are usually around 15% or so. This is a good way for you to build a credit history during school. This can help you to eventually lower your interest rates and then be able to raise your credit limits higher. If you are struggling to get a card then you might have to get a cosigner. This is fine and can be a good way to make sure that you are taking care of that card because someone else is responsible with you. I would also ask advice from this person as to how to properly spend wisely with a credit card.

If you are having issues getting a credit card and you can’t get a cosigner then it would probably be good to go after a secured line of credit. This can be a good option for students that are struggling to get a credit history establish and are easier to come by. You will probably have to make an initial deposit equal to the amount of money you want to have as a credit limit. Whatever type of card you are able to get, build a first initial impression with the credit bureaus and your creditor so that they are able to offer your better rates in the future.

Low Limit High School Student Credit Cards

To be honest the idea of high school kids running around with credit cards should probably make us all a little nervous. Teenagers aren’t known for their foresight or restraint are they? No, they’re not. They’re known for seeking excess. I’m not saying it’s such bad thing. Teens need to spread their wings a little, rebel a little.

So when we think about the right way to ease kids into the world of credit cards, we want to make sure they have that sense of freedom without giving them the chance to get a headstart down the road to financial ruin.

When I got my first credit card I was 18. I was financially clueless. I was clueless in everything else too. But especially financially. A good friend and mentor advised me to get a credit card so I could establish credit history and get a decent credit score while I was still young. He also advised me to keep the limit low. This was his advice:

“Get a low limit credit card. Everyone screws up and maxes out their credit cards at least once in their life. You’re better off doing it with a $500 credit limit than with a $5000 credit limit.”

He couldn’t have been more right. Sure enough, I maxed that credit card out soon after I got it. Luckily it was only $500 worth, and I only had to see one finance charge on my statement to realize I didn’t want to misuse credit cards ever again. I’ve made my mistakes since then, but I’ve never forgotten the lesson learned from my first credit card.

For parents who want to give their teen an even safer credit learning tool, there are prepaid credit cards. In a sense, it’s not a credit card at all. It’s a charge card. What that means is you load it up with whatever amount of money you’re okay with your teen losing, and then let them experience making purchases with the plastic.

If nothing else, using a prepaid credit card should teach kids that credit cards are ‘real money’. In other words, you may not take the cash out of your wallet and hand it to the cashier, but it’s money you’re responsible for. When you run out of money on the prepaid card, the card is useless. That’s a great thing for a kid to get used to. It should help them understand that credit cards are a tool to be used intelligently.

Free Student Credit Cards

What’s the first word that comes to mind when you think about being in college? Broke. That was me. I was broke from the minute I walked into my first college class until about six months after I finished my last one. Then I finally had job and a little money, and I was able to move past the beater apartments and ramen noodles.

But while you’re in school you have to spend most of your time pinching pennies. That’s why when you’re looking for credit cards you can’t deal with bunch of fees. I mean, they’re already going to charge you high interest rates, given your lack of credit history and a fairly low credit score.

It is a good idea to get a credit card or two while you’re in college. When you get out of school and get that first job, you’re going to want to buy a car to replace your Geo Prizm and maybe even buy a condo or a townhouse. If a bank is going to even consider giving you the loan for your toys and your new pad they will need to see that you know how to use credit. In other words, they need to know you’re probably going to pay them back.

Check out this list of student credit cards that can help you get the right start in the world of debt and credit. Use them wisely.

  • Bank of America Student Visa Platinum Plus Credit Card- no annual fee.
  • Capital One Platinum Student Credit Card – no annual fee and no balance transfer fees. Retail savings program with yahoo!
  • Discover Student Clear Card – no annual fee and 0% APR for six months.
  • Discover Student Monogram Card – 0% APR for six months and choose your own design.
  • Discover Student Tropical Beach Card – 0% APR for six months and no annual fee.
  • Discover Student Card – 0% APR for six months and no annual fee.
  • Citi Bronze/AAdvantage Card for College Students – no annual fee and free membership into American Airlines rewards program.
  • Citi Platinum Select Card for College Students – 0% APR and no annual fee.
  • Discover Open Road Card for Students – 0% APR and no annual fee.

Most of these cards also offer online account management. And one more thing – they’re going to give you a small enough credit line to keep you from getting yourself into trouble while you’re in school.

Fixed Rate Student Credit Cards (That Even Allow Balance Transfers!)

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Before we talk about fixed rate student credit cards, we should talk about fixed rate credit cards in general. A fixed rate credit card isn’t such a common thing. Why?

Because interest rates change, that’s why. Think about it – every so often you hear an announcement that the Fed is raising or lowering interest rates. When they do that, all interest rates change with the ripple effect. It’s a good thing and a bad thing for all of us that use the financial institutions (which is pretty much everybody).

For example, when rates go up theirs an upside and a downside. On the downside, it gets more expensive to borrow money. Auto loans, mortgages and credit cards all hike their rates to reflect what the Fed did. On the upside banks will usually pay more interest on savings accounts and other deposits. Any of you that have an ING Direct savings account know what I’m talking about. As interest rates have climbed, I’ve seen them raise the rate they pay on my online savings account to over 5%. Not a bad deal.

Now, in some cases credit card companies will offer a fixed rate on a credit card for as long as you have the card open (for example: Prime + 3.99%). They do it to entice people who don’t like the idea of having a credit card at 18% or 21%. If you’re going to get a fixed rate credit card, though, you probably need a pretty good credit score and some credit history.

So What About Fixed Rate Student Credit Cards?

I found IndexCreditCards.com, which gives a long list of student credit card offers. Only two on the list mentioned a fixed interest rate:

  • AmTrust Bank (formerly Ohio Savings Bank) Student Credit Card – offers a fixed rate of 7.9% or 13.99%, depending on your credit worthiness.
  • Sovereign Bank Student Credit Card – 9.9% or 15.99%, also based on credit worthiness.

The reality is it’s tough for students to get fixed rate credit cards because they’re still a risk to the credit card company. If you can’t get one of the two I’ve listed above you may have to use a variable (high) rate card until you’ve proven you can handle a credit card.

Student Credit Cards With College Logos

These cards can be very cool to purchase. It is always nice to have a card from your alma mater to toss around to show your appreciation for your experience there. There are a lot of colleges that offer this type of service. You can contact your college’s financial office to see if this is something they personally offer. You might have to go to a bank that is near the school or on campus that will provide you with a school card and a Visa or MasterCard logo.

If you can not find it there, then I would go check online to find your school’s logo and the credit card of your choice. I suggest that you are better off getting a card that can’t get your school’s logo on it with better rates, then going with the card from your school that might not be as good of a deal.

Now realize that this probably doesn’t mean that if you use this then it will be like a airline credit card where they offer a free mile in the air for every dollar spent. They are not going to give you a dollar off tuition. Nice try though. They might offer you deals on clothing products or memorabilia. This can be fine if you are a fanatic about your school. I don’t feel that way about my college I attended, although I enjoyed the experience.

If they do provide offers then you might be required to give an annual fee of some kind to cover all of the materials that they are giving out and simply to build a business. I wouldn’t worry about this if you really like the card. This is definitely more of a novelty item than anything else. I have to say that I have had student credit cards before and they aren’t that impressive. You are probably better getting a student credit card with a company that offers you good value like an airline company or some other company that is going to give you value that you could use for a long time. I don’t know if you want to get a credit card from a school unless you want to create a shrine.

Just make sure that you take the time to check interest rates and see what type of fees you have to pay. I think that there are a lot of ways you can show your appreciation other than just getting the school’s logo on your credit card, but if it helps you to spend your cards often followed by paying it off in a timely manner, then this can be a great way to help with your credit and show your pride.

First (1st) Financial Bank Student Credit Cards

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For me there are a few core qualities I’m looking for in a company that’s going to be dealing with my money. First, they need to have some years behind them. If I’m going to trust a company with my personal information and my hard-earned cash I want to know they’ve been around the block a time or two. Second, they need to have a clean history. Clean as in the opposite of everything the guys at Enron decided to pull. Clean as in forthcoming with all the details of our dealings with each other.

Students looking for their first credit card as they leave high school and enter college should be looking for those same kinds of qualities. Debt is getting out of control in this country and you have to make sure the company you’re working with is looking to make a profit, but not if it means your financial ruin.

1st Financial Bank is that kind of company. Look around a little bit on the internet and you’ll find good things said about these guys.

1st Financial Bank was founded in 1910 and is located in South Dakota. The bank has become exclusively committed to providing financial services to students across the country.

They sponsor an entire site dedicated to educating kids about college life, especially its financial aspects.

The site, called collegedata.com, touches on three main topics: ‘college 411′, which is designed to help you find a school that’s a good fit for your personality and goals; ‘prepare and apply’, where they’re looking to help you improve your chances of getting accepted and keep track of what schools are looking for; and ‘pay your way’, which teaches you about scholarships, student loans, and college expenses.

I realize this website is a marketing tool. It’s a lead generator – they get you on the site to show you information about college and the longer you’re on the site the more likely you are to fill out an application. They’re looking for customers, and I don’t blame them. They give some free information and end up with loyal cardholders. It’s a win-win.

If there websites are any indication, these guys are committed to keeping costs down. That can translate into lower fees and interest rates for cardholders. I can appreciate a company willing to sacrifice some aesthetics for the sake of cost control. It’s good business, and it gives me more confidence in them.

1st Financial Bank student credit cards won’t be anything flashy, but they’ll be a good tool to help you get your credit life started in college.

Apply For Student Credit Cards

One of the best things that any student can do is to go out there and get a credit card. I think that many students fail to establish credit early and then by the time they are adults they have been spending only with a debit card and not able to buy a house or a car. I think that it is in your best interest to get a card going as soon as possible. If you are having issues then get a parent or an older sibling to cosign for you. This can be a great way to start off on a good note. If they are careful with their credit then they will teach you how to use the card correctly. Respect what they have done for you and use the card wisely.

Also you should open a checking and a savings account. This can help any credit company take a look at what you are doing with these accounts and how you spend money. This could be a great source to get a credit card from when the time comes. Also a lot of teens are offered store credit cards from clothing apparel chains like American Eagle, Buckle, Abercrombie, etc. These are also good ways to start establishing good credit. Now this could be scary for some of you because you spend money at places like these like a crazy person (this is specifically for the women). So I suggest you don’t spend anything on that card, which you can’t go without. Make sure that you have those funds in a checking account. Don’t start playing the game of making payments with a credit card and hoping money will fall from the sky.

Apply For Student Credit Cards Online

One of the easiest things you can do is get a credit card online at a valid banker. Be careful that some third parties are scams, but many are clean vendors for these major companies that allow for these big companies to spread their wealth on the Internet. Make sure that they are truly associated with a major credit company and then you could potentially find cheaper rates this way.

If you do apply for a credit card online, make sure to have an adult there the first time. This can be good because they will be able to help you know what to look for with a card. You can find cards without having to worry about annual fees, low APRs (not just initially) and unsecured cards that don’t require an initial deposit equaling your credit limit. Be smart with your choices and you will build a strong initial relationship with credit bureaus.

Compare Student Credit Cards

Credit Cards are a commodity product. What does that mean? Commodities are products that are really only differentiated by the price and terms of the purchase. A mortgage is a commodity product, as are homes, cars, cell phones – you get the idea.

Why do I bring up commodities? Because when you’re going to compare student credit cards you have to understand there probably won’t be much difference between them when it comes to rates, fees, etc. You’ll want to dig a little deeper for the intangible benefits offered by the different card providers.

Let me give you an example:

I read a review from a young man in the UK that had applied for a graduate student credit card with Barclay. He wasn’t happy at all. He had three main complaints: 1. They asked for a letter proving his status as a graduate student, then didn’t accept the letter he sent them. 2. Their customer service center was located in India, which on its own might not have been a huge problem, but the agent he spoke with seemed to give him a lot of attitude and spoke with such heavy accent that they couldn’t even understand each other. 3. They finally approved him for the card, but only gave him a limit of about $500. His feelings? “What’s the point?

Near the end of the review he also complained about the high interest rate. Lastly he mentioned having transferred all balances to a Virgin credit card.

What’s the lesson? I’m guessing this guy initially liked the idea of opening a student credit card with a notable company, looking to build his credit score and his credit history. What he got was a lot of hassle and he ended up with a credit card he didn’t even use in the long run.

I strongly recommend reading some reviews online of the customer service a credit card company offers. Just because you’re a college student looking for an opportunity to improve your status as a credit holder doesn’t mean you have to settle for mistreatment by the company you’re generating a bunch of revenue for. Find a card that treats you well. I’ve had great experiences with Bank of America’s customer service.

Compare Rates for Student Credit Cards

So let’s say you’ve found a couple of companies offering student credit cards that have great online reviews for how they treat their clients. At this point it comes down to price and limits. That means getting down to the cold hard numbers – what interest rates are they offering on balance transfers and purchases? How big of a credit limit will they give you? Do they charge application fees or an annual fee?

Once you know they’re going to treat you right, and you know the numbers make sense, go for it.

The Best College Student Credit Cards

Some of your best memories (or possibly worst) are probably from when your mom, dad, aunt, uncle or whoever it was gave you your first bike. Remember that? Even though you couldn’t really get hurt because you had those spectacular training wheels (not to mention the streamers hanging from the handle bars and the stability of the banana seat) which kept you from tipping over, you were still terrified.

Eventually the day came when you were ready take off the training wheels and go for it. You ate it a few times, probably picked up a couple skinned knees and elbows, but you made it. You think I can turn this trip down memory lane into a great financial analogy? You bet I can. I’m going to compare your training wheels to the best student credit cards.

Credit cards can be your best friend or you worst enemy – kind of like that first bike. Yeah it was speedy, great looking, and you looked cooler than ever on it. At the same time, if you hit that curb wrong or didn’t quite make it around the mailbox at the end of your driveway, you were dead.

Credit Cards can be one of the best financial tools to help you manage your life. They can act as a bookkeeper for you so you know where your money is going. They can help finance a business. They offer rewards programs that can get you cash, prizes, or (my favorite) free plane tickets. All this can be yours, but you have to handle them right.

College is a great time to start your life as a credit card owner. You still have relatively few expenses, but you can use your card to pay for food and gas, and going out with friends. All the while you’re building your credit score and credit history. You just have to be careful. There is such a thing as too much of a good thing.

Over the last couple of years credit card companies have been more and more aggressive about marketing to college kids. They’re extending credit cards to more people and giving the college students higher credit limits. That’s fine if they’re using them in the right way, but student credit cards with high limits can get a kid into trouble fast. Real fast.

So what are the best college student credit cards? They have a lot in common with other good credit cards. They offer reasonable rates, they have some kind of rewards plan, and they don’t have a bunch of fees. You may not be able to find all those good qualities in one card, but you should try to get as many of them as possible. Remember, you’re new to the game and sometimes you have to pay to play in the form of some fees and high interest rates.

Here’s my most important piece of advice: start with a low limit and don’t let them increase your limits until you know you can handle it. You’re probably going to mess up and max out your credit cards at least once in your life. Better to do it with a low limit than with a high limit.