Ideally, the best credit card for a college students is no credit card at all. Credit cards can be a useful tool for emergency financial situations, however when abused or used irresponsibly, credit cards can leave a student in deep financial debt. The Credit Card ACT of 2009 has changed the way in which credit cards are made available to college students under the age of 21. The Credit Card ACT of 2009 stipulates that college students under the age of 21 are required to have a parent cosign on the credit card application, unless the student can demonstrate sufficient income when applying for the credit card. With this new law in place, even the “best credit cards for college students” will likely require a creditworthy cosigner if you have little credit history or insufficient income.
If you have made the decision to obtain a credit card in order to build credit or to have in case of a financial emergency, it is key to understand how to use your credit card responsibly. Credit cards for college students, unlike student loans, do not allow for payment deferment until after graduation. Once you begin to use the credit card, monthly payments will begin immediately. Failure to make the minimum payments, or failure to make monthly payments on time could result in damage to your personal credit. Finding the best credit cards for college students will take some research on your part. The best credit cards for college students are typically those with the lowest interest rates, and ones that carry no annual fee. Below are a few things to consider when on your search for the best credit cards for college students:
#1 Low Annual Percentage Rate (APR)
This is the interest rate that you will pay to borrow money the credit card. The higher the APR, the more you will owe in interest only, if you do not pay off the entire balance each month. Some credit cards offer a low introductory APR or an APR of 0% for a set period of time. Make certain you understand what the APR will be after that introductory phase.
#2 Annual Fee
For college students who plan to simply have a credit card for emergencies or for small purchases, having a hefty annual fee may end up costing you a lot to borrow a little.
#3 Default Interest Rate
This is the interest rate you will be charged for making a late payment or for paying less than the minimum payment required. This higher interest rate will apply to all future purchases and to any balance you already have.
#4 Universal Default
Even if you always pay your credit card bills on time and in full, some credit card companies will raise your APR due to your bill paying history with other creditors.