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College Student Credit Cards

College Student Credit Cards: Good APRs for the College Bound

 

College student credit cards are not that different than their non-student siblings. They are offered by the same companies and look and behave the same, with low "teaser" rates and competitive terms after the introductory period. The credit requirements are less stringent, however. In fact, the single greatest difference between normal cards and college student credit cards is that the applicant must be a full-time student at an accredited university.

 

Credit History? What Credit History?

 

Credit checks are performed for college student credit cards, but the standards are less stringent. Those who have the best credit will be given better offers. In our February 2005 survey we uncovered an average introductory rate of 2.96% Annual Percentage Rate, followed by an average of 13.77% APR after the introductory period. The best introductory APRs were near 0% APR (variable, so we do not consider them to be truly 0%), and 8.40% APR after the introductory period. The highest rate offered was 17.99% APR. Most of the cards did not have an annual fee.

 

Fees, Fees, Fees

 

These college student credit cards offer good rates, but examine the miscellaneous fees for college student credit cards before you select one. If you miss a payment or otherwise default, you are likely to find yourself at an APR even higher than the maximum promised after the introductory period. You would also be subject to late fees of at least $40 per incident. While most of the cards did not have an annual fee, there were a few that included $20 annual fees.

 

What's in Your Wallet?

 

Good college student credit cards are available from CitiBank, American Express Blue, Bank of America, Sovereign, and all the other leaders, with the notable exception of Capital One, which during this survey appeared to have no college student credit cards available.

 

CitiBank offers an intriguing card with their Dividend Platinum Select card for college students. This college student credit card offers a fixed 0% APR, 5% cash back on eligible purchases, and 1% cash back on cash withdrawals. After the promotional period the APR jumps to 15.49% variable, and if at any time you default on the card you will see charges of at least 20.49% APR. The 1% interest on cash withdrawals isn't that inspiring and is likely to ensnare college students with terms hidden in the fine print: a 3% transaction fee (minimum $5) plus the 20.49% APR on cash withdrawals. This card is illustrates the importance of research combined with discipline.

 

And the Lesson is?

 

With the information gleaned here, you should have an idea of maximum, minimum, and average interest rates charged in college student credit cards. However, the real lesson is the importance of understanding the fine print when it comes to college student credit card offers. Never carry a balance from month to month. Instead, pay your college student credit card bill as soon as it arrives, and only use the card for convenience and to establish a good credit history.