Do all students need a credit card? Whether you’re off for the summer from college or you are headed to a campus for summer classes, chances are pretty good you will need a credit card in your backpack.
You may need to buy books, take a friend for a coffee or pay your frat or sorority house dues on the fly. Whatever the purchase, big, small, or even in between, plastic is almost always the best answer. Especially since most college students rarely have a wad of cash on their person.
How do you decide what the best student credit cards on the market are and what should you look for? Before you start filling out applications, it’s best to make sure each offer is right for your needs. Luckily, there are a few tips to help you decide on which credit card is worthy of your signature on the back.
Use these tips to find the best student credit card for your particular needs:
Say no to cards with annual fees. Students should always limit their search to cards that don’t charge annual fees. A student’s top priority for using a credit card is to build credit, after all, and most college students have limited budgets. So the best student credit cards are therefore those that are basically free to maintain.
Hone in on rewards if you plan to pay in full. Paying your bill in full every month is the best approach because it will save you from expensive interest charges and help you avoid getting into the bad habit of spending above your means. And since interest rates don’t matter when you pay in full, you can concentrate on getting the most lucrative rewards for your spending habits.
Look for a 0% rate for large purchases. There are a handful of 0% APR student credit cards available, any of which could save you a boatload if you plan things right. That means applying a few weeks before your desired purchase date and repaying your balance before regular rates take effect.
Transfer a balance if you’re in credit card debt. A few student credit cards offer 0% intro rates on balance transfers. With that being said, you’ll need to consider more than just the length of the 0% term, including each card’s balance-transfer fee and regular APR.
Obtain a secured card if you’re rejected. Secured cards are the easiest type of credit card to get approved for. The reason is this: They require a refundable security deposit that serves as the account’s spending limit and reduces risk from both the student’s and issuer’s perspective. They also are indistinguishable from unsecured credit cards on your credit reports, which means you can build credit and practice responsible habits without running the risk of exacerbating your situation. So, if you have damaged credit, opening a secured card and rebuilding your credit standing is a must.
Whatever credit card or cards you choose to carry in your wallet, be sure they are suitable for your needs and always remember to pay them off as soon as possible to stay out of debt and to avoid having to call home to be rescued.