The Student’s Credit Card Checklist

credit cards

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Students in college are often targeted for special credit card deals. The problem with so many offers and cards designed around the needs of college students is determining what to look for and what to avoid. Understanding a few key elements in the card and adding them to the list of must-have features can help avoid poor card deals that ultimately make it hard to keep up.

No Annual Fees

The first element students should look for when using a credit card to pay for college is whether the card has an annual fee or not. As a student, the annual fee is not a necessary part of the card because the rewards that come with the added expense usually will not be applicable to students.

Instead, students should look for cards that do not have an annual fee. A wide range of credit cards forgo this particular expense, so it is not necessary to put up with an extra cost each year.

Low-Interest Charges

While students are considered a high-risk category since they have not yet established a credit history, it is possible to obtain a reasonable interest rate on the credit card. As a student, a reasonable charge generally ranges between 13 percent to 20 percent interest, depending on the card and the income situation.

By opting for a card that offers a reasonable interest rate, students are helping avoid added costs that can get out of hand. Those who find a credit card with a 0 percent introductory rate should always read the fine print to determine the interest after the promotional period. Ideally, the end of a promotional period should never exceed 20 percent on interest.

Low Limits

As a student, responsible credit is still a work in progress. Students might feel that they are responsible and likely to repay the full amount on the card each month, but it is easy to allow credit cards to get out of control. Students should look for a card that has a low spending limit to help learn and understand the process of using the card and repaying it before looking into options that offer a higher card limit.

A card with a low credit limit can still help pay for items like books, but it also prevents spending more than students are able to easily manage in monthly payments. A limit of around $1,000 or so is ideal for many students who are still getting used to having a credit card available.

Rewards that Benefit Students

Another aspect to look for in a credit card is the rewards program. Many cards offer rewards, but not all rewards are useful while still attending college. For example, a student who is attending college near home might not benefit from a card that offers airline travel rewards since travel does not require taking a flight.

Student-friendly rewards include cashback, discounts in stores that students shop in, discounts on local entertainment, or coupons for grocery expenses. The best rewards program is one that fits an individual, so students should always look into their particular spending habits and needs before selecting a rewards program.

Promotional Deals

Promotional deals are often a highlight of credit cards. When students are looking into promotions, a common item is a zero percent interest rate. The potential problem is that the promotion might not be worth the time period. In general, students should look for promotional periods that last at least 12 months to make it worth using.

Students’ credit cards offer a wide range of potential options, but it is important to keep the elements of the best cards in mind. Students need to read the fine print and understand the card terms and conditions before taking out this revolving credit.

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