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Discover Card might be viewed by some as the little brother of the major credit card providers. Visa is everywhere you want to be (at least that’s what they used to say), MasterCard is for everything that’s not priceless, and Discover…well, I’m not even sure. They’re trying though. I have to give them that.
As Discover tries to build its brand and compete with the heavy hitters of the credit world, it looks to tap into a potentially huge and lucrative market – college students. Tens of millions of kids go to college every year. We’re talking about tomorrow’s earners, and consequently tomorrow’s big spenders.
They’re watching mom and dad sink deeper into credit card debt every year, and as the saying goes, the apple generally heads down the same path as the tree and racks up a bunch of debt on the way. Or something like that.
Anyway, Discover knows that if they can get you on board while you’re in school you’re likely to stick with them for a long time. My parents have had a Discover card for over 20 years. I think they might have the first one.
In order to impress you Discover has put together a ‘Credit 101′ course on their website designed to educate and persuade you – to open a Discover Card Student Credit Card. They put great questions on there such as: What is a credit card? and What is a credit report? and How can you build your credit history?
The quiz is multiple choice, but they’re not actually trying to insult your intelligence. I guess the thought process is if they can educate you and keep you on their website you’ll probably fill out an application. Of course they’re hoping you’ll get approved, run up a balance, and make minimum payments for the rest of your life.
But you are way too smart for that. If you open one of these cards you’re going to use it to build credit score and credit history while making your monthly payments on time and never paying interest. Good for you.
- Here are a few of the benefits of the card:
- Six months introductory APR of 0%.
- They won’t make you pay an annual fee.
- You can get 1% to 5% cash back, depending on the type of purchase you’re making.
Along with those they give you the standards for most student credit cards – online account management, email bill reminders, etc. It looks like Discover will take good care of you if you pick up their student credit card.
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There are plenty of credit card companies that are willing to send offers in the mail, bombard your e-mail account, and call to see if you want credit cards. These companies are drooling to offer credit cards for students looking to build credit history. I remember when I turned 18 my mom kept a huge stack of all of the credit offers that I started receiving. It was relentless and made me think of how many companies out there are looking to prey on college and high school students to get them to spend money carelessly. Many credit card providers take the same stance as gun dealers, “Card issuers don’t kill credit, customers do.” This can be a very true statement because many students are willing to dump their credit in the trash very quickly.
First of all I think that you need to realize quickly how important your credit is. There are so many things you can purchase out there where your credit is going to be vital. Good luck getting a car or house without good credit. You better have liquid assets to use or even if you get your desired items then you will probably have to pay high interest rates or have large payments required. You will appreciate good credit often, even in simple purchases where a credit check is necessary to get a security system, a boat, furniture, televisions, cell phones, etc. It is basically your financial integrity to society.
Here are some things to look at before getting a credit card. Start by opening a checking account and a savings account. This is a good sign for a creditor to tell of your financial history and if you pay off bills like rent or utilities. Next get a store credit card and pay off your items you buy there promptly. These are easy to obtain, they give you some kind of discount, and can help you to start intelligent credit habits. You might have to get a secured credit card initially, which will require a deposit that equals the credit limit you are going to establish. This is another nice way to get your foot in the door.
When I was in high school I got a line of credit through my mom’s account that she cosigned on. This helped me out a lot. I really never used the card and my mom taught me early on how to pay these cards off consistently. If you are concerned you will not be able to pay it off or just want to save time then do what I did and set up an automatic payment relationship. When it came time to get my own account it was easy. So approach your parents and explain you want to establish your credit. Most parents would consider that very mature of you and look for some way to help you do that.
