August 22, 2015

Best Instant Credit Cards for College Students

Students heading off to college face many challenges like getting and maintaining good credit. As a freshman, a student will get lots of instant approval credit card offers. These credit cards come in various forms. Some require no credit history or bad credit is okay when you sign up. However, the best credit cards for students are not necessarily easy to get but will have zero annual fees or the lowest interest rates.

Let’s help you better evaluate the best options out there.

Some of the top cards when it comes to meeting the needs of students are Discover’s Discover it for Students card, the Citi Dividend Visa, the Citi Forward Visa Card for College Students and the Journey Student Rewards from Capital One Visa.

What makes one card better than the next?

In the beginning, there were fewer options in credit cards and most of them were offering the same services and features. Banks operated on a one-card-fits-all principle. This approach has long since been abandoned by most companies. 

Discover’s Discover it for Students card, directed toward young adults, is one of the best overall options for college students in general. What makes this card appealing for young adults who are learning to handle their finances for the first time is that this card allows for the little slipups, such as forgetting to pay your bill on time, that often occur with novices.

The Journey card from Capital One and the Citi Forward visa have also been designed with students in mind. Both cards offer cardholders the chance of lowering their APR by paying bills on time. In theory, this gives young adults an incentive to establish good credit habits.

Interest Rates

The importance of interest rates cannot be overstated. The APR on a card should be one of the first aspects a prospective customer identifies.

Of the cards mentioned above, three offer introductory 0 % APR on purchases. Both the Citi Forward and the Citi Dividend offer the 0% APR for the first 7 months. Discover it for Students offers the initial 0 % purchase APR for 6 months.

These interest free periods give new cardholders a chance to get acclimated to using credit under more favorable terms. Once the introductory period ends, the purchase APR for both Citi cards is 13.99% – 23.99% (variable). The Discover card also has a variable rate of 12.99% – 18.99% after the first 6 months. Capital One’s Journey card has a 19.8% variable APR purchase rate.

The offers with lower interest rates are most important to cardholders who carry a balance from month to month. The lowest rate is offered by the Discover card, and may be better suited for these cardholders. Note that introductory rates are exactly that, introductory. Once the specified length of time passes the rate will increase significantly.

Features:

While credit is a serious matter, credit cards companies recognize the need to make their offers fun, especially when the potential customers are students. The way companies make their cards more appealing is by offering rewards and bonuses.

The Citi Dividend card and the Discover card offer 5% cash back on purchases of designated items and these cards also offer 1% cash back on all other purchases. The 5% cash back programs do have specific restrictions and limits.

Discover limits the 5% cash back to $1500 in purchases, and the category of items that qualify for this reward rotate quarterly. The Citi Dividend allows cardholders to earn 5% cash back on purchases in drugstores, convenience stores and gas stations as well as on utilities during the first 6 months.

The Citi Forward card allows cardholders to earn 5 Thank You points for every $1 purchase. Points can also be earned by paying bills on time. These points can eventually be redeemed for gifts cards, travel and cash. The Journey card offers 1% cash back on all purchases.

Fees

In addition to the interest paid on purchases, credit cards often have other fees not related to purchases. One of the more common of the extra charges is the annual fee.

The Citi Forward card does not have an annual fee and the purchase APR can be reduced 2% when a cardholder makes purchases and pays the bills on time for 3 consecutive billing periods while not exceeding his or her credit limit.

The Citi Dividend has no annual fee and the purchase APR can be as low as 13.99%, depending on credit history.

The Discover it for Students cards has no annual fee and depending on the credit of the individual cardholder the APR for purchases can drop as low as 12.99%.

The Capital One Journey card also has no annual fee, with a 19.8% variable APR on purchases. This card does not offer the 0% introductory rate.

To get the best credit cards, students and parents should closely read all credit card offers. Choosing in an instant without reading the fine print can get you into trouble. Options are plenty which make choices difficult. What’s the best guideline? The best credit cards for college students are those that will save you a lot of money in the long run and will help you establish a good credit history for your professional future.