Q: I'm going to enter college this upcoming school year. I plan to pay off my balance completely each month. How should I choose a credit card?
Q: I have never had a credit card, and I'm going to enter college this upcoming school year. I plan to pay off my balance completely each month. I can't make sense of what would be a good option to get. How should I choose a credit card?
A: A few lenders offer student credit cards that may work for your situation, depending on your age and your income level. While federal rules may restrict your choice, the options you'll enjoy can set you up for a solid personal finance strategy.
Thanks to the Credit CARD Act, you've got two ways to get a credit card as a college student. If you're under the age of 21, you'll need to apply for a credit card with a co-signer who's willing to vouch for you by putting their own cash on the line. Instead of just being an authorized user on your parents' account, for example, consider setting up a separate account that can help you build your own credit history. The downside: your co-signer will see every purchase you make.
On the other hand, if you're over the age of 21 and you can prove you've got an income beyond your financial aid package, a handful of banks offer specialized student credit cards that reward your on-time payments with special perks and rate discounts. Whichever situation describes yours, determine what your needs are, and work at building a lasting relationship with a trusted lender.
Remember that your FICO score grows along with the age of your oldest credit card. Compare the top credit cards on CardRatings.com and choose a lender now that you'll feel comfortable doing business with over the next ten years, or longer.
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