Choosing a Credit Card While in College

Going to college is a major rite of passage. You move out of your parents’ house, you start working your way toward a career, and, arguably best of all, you finally get to have a credit card. Most college students get bombarded by credit card companies, which might leave you overwhelmed and unsure of which card is right for you. A credit card is a staple of college life, but you want t make sure you choose wisely. In this post, we’ll give you some information on how to evaluate different cards to choose the ideal card for you.

How Cards Differ

The main criteria you will want to evaluate in selecting a credit card is the so-called “fine print.” This will contain important information like APR, billing cycle formats, and any penalties and charges. If you can, try to choose a card that comes with a low introductory rate initially. The lower the APR of the card, the better. For the most part, though, the biggest differentiator between credit cards is the rewards program. Here are the most common types of rewards programs to help you decide which will be most beneficial to you:

• Gas rewards - If you commute to campus or use your car frequently, you might consider getting a credit card that offers free gas rewards. With these cards, you will earn free fuel with every dollar you spend on your card. On select purchases, you can sometimes even get gas rebates as high as 5%. If you drive often, this card could save you a lot of money.
• Travel rewards - For people who attend school far from home, a travel rewards/frequent flyer credit card could pay off. With travel rewards credit cards, you can earn free hotel stays, car rentals, and flights with every dollar you spend.
• Cash rebates - Cash rebate cards are ideal for people who will spend enough to earn an appreciable rebate and who prefer cash to other types of rewards. The size of your cash rebate will vary from card to card, so make sure you consider that when selecting your card. Usually, the cash rebates range from 1-5%. You typically then receive checks, gift certificates, or gift cards once you accumulate enough rebates.

Credit Card Alternatives

If you’re wary of credit cards, you might also consider a prepaid card or a debit card in lieu of a traditional credit card. A debit card will take money directly from your bank account, so it offers the convenience of a credit card while functioning more like cash. A debit card can help you avoid accumulating debt and having to deal with monthly bills. You may also get a prepaid credit card, which you load with a cash balance beforehand and are then limited to that balance. This offers the convenience of a credit card without the temptation to overspend.

Additional Resources:

• Credit cards: A dangerous convenience
• Identity Theft