Being away at school offers a plethora of spending opportunities. Some are to be expected, like books, groceries, rent, utilities and random university fees. And some, like hospital and auto expenses, are not so expected.
Usually such expenses might be covered by parents, but the dismal economy has made it so parents are often unable to contribute allowances to their college-aged children. And the truth is that student loans, even a PLUS Loan that’s supposed to cover the entire cost of education, including living expenses, can only pay for so much.
This is when most college students turn to credit cards and likewise expose themselves to the wonderful world of credit-card debt. The average undergraduate in 2008 carried $3,173 in credit card debt and just-graduated seniors averaged $4,138, according to Sallie Mae, a college-financing company.
Clearly, it’d be beneficial for college students to sign up for one more class this semester: Credit Cards 101.
Fortunately for financially irresponsible students and their parents, February’s Credit CARD Act will now require that if you’re under 21, you’ll need to prove that you possess the income necessary for the credit card payments or get a co-signer 21 or older to be made jointly responsible for the future charges.
You’ll find more information on the Credit CARD Act here.
There are numerous pros and cons to credit card usage. So whether you’re for or against the use of credit cards as a means for college students to make everyday purchases, it’s still good to know what kind of cards are out there.
Here are some cards worth a college student’s consideration:
Citi Forward Card for College Students
Listen up, this card prizes responsibility. If you can manage your balance and pay bills on time, you can earn up to a 2 percent reduction in your APR, which is between 12.99 percent and 19.99 percent.
Citi’s Thank You rewards program is a great perk as well. It has many rewards options like airline tickets, hotels, car rentals and vacation packages. A Citi Forward cardholder earns up to 8,500 bonus points if you use paperless billing and spend $250 within three months of opening the account.
Citi Dividend Platinum Select Visa Card for College Students
This is a good card for students that spend a lot of money.
Five percent cash back at grocery stores, drugstores, gas stations, convenience stores and utilities including cable for the first 6 months (it’s subsequently 1 percent). You can also earn 2 percent cash back on rotating categories like restaurants, apparel and hotel.
Also a good card for heavy spenders, this card is pretty comparable to Citi’s Dividend Platinum Card. Discover’s Cashback Bonus program offers up to 5 percent in cash back rewards when you make purchases in rotating categories like travel, department stores, gas, groceries and certain restaurants, and carries with it no annual fee. You’ll receive up to 1 percent cash back on everything else.
It also comes with multiple design options, including the ultra cool Discover mix tape.
Orchard Bank Classic MasterCards
This is a good card for those weighed down by student loans. Student loan debt can be detrimental to your credit score, making it increasingly difficult to obtain a credit card. The Orchard Bank screens your credit and instead of denying you if your credit is poor, they’ll approve you for the card that best matches your credit history.
Although APR is very high and your annual fees are determined by your current credit score – ranging from $0 and $74 – if you can’t acquire credit anywhere else, this is the card for you.
Capital One Student Rewards Card
The cash back rewards on this card are pretty great because not only do you receive 2 percent on restaurants, entertainment and cell phone bills, but students also receive 2 percent on textbooks that seem to gradually become more expensive with each passing school year.
There is no annual fee, but a 24.9 percent APR on purchases is particularly high for keeping a balance month to month.
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More from the Quizzle Wire:
- Debt Consolidation: Is It Right for You?
- 4 Money Tips for New College Grads
- Your Credit Score Takes a Hit with Each Hard Inquiry
- How to Build Credit from No Credit in 6 Easy Steps
- Credit Improvement in 5 Steps
