Credit Tips: What is the Best Student Credit Card

Posted On: July 10, 2006

Author: FaithNGrace
Posted: Mon Jul 10, 2006 10:56 pm
Post subject: Which student card?

Quick Question: Which of these student cards would be the most friendly to college students with no/limited credit history?

BOA Student Platinum Visa
AMEX Blue for Students
MBNA for Students
or
Discover Student Clear

It’s better to spread the apps over several months, right?

Thanks a bunch!
_________________
FaithNGrace
slowly learning about the wonderful world of credit!

Author: davej
Posted: Tue Jul 11, 2006 2:12 am
Post subject:

I guess BoA would be the easiest to get. And given the acquisition of MBNA we might see their student cards merge sometime soon. Discover may be a little tougher to get, but this may not be the case with student cards… AmEx for students is another good card, and AmEx is known for their generous credit limits. In fact, if you don’t have a lot of recent inquiries you will most likely qualify for all of them.

Author: hdporter
Posted: Tue Jul 11, 2006 2:33 am
Post subject:

Most student cards are designed for people with limited credit experience and therefore likely friendly so long as you meet stated income requirements, provided you have no negative credit information reported.

A card choice should be driven, by among other things, how you expect to use it. If you expect to carry a balance, a lower rate card is preferable. If you expect to pay in full, then a strong rewards card is best.

As a student, I encourage you to push very hard to pay the card in full. Limited income and a natural urge toward impulse purchases can mean that you max the card out early on, leaving yourself at a disadvantage once you leave school. Further, ideally you should never carry a balance that is greater than 50% (preferably no more than 30%) if you want to receive future consideration for prime credit on limited history.

– Discover: Of the cards you mention, has among the best interest rates (beating out some others by as much as 2%), but on the typical modest student purchase budget, is likely to pay less than half in rewards (considering high reward rates on other cards plus bonus rewards on grocery and gas purchases). That’s compensated for by being a cash reward — most others reward in merchandise cards — and in offering a double reward rate if you redeem the Discover reward in the form of merchandise cards. The card has a strong reputation.

– MBNA potentially offers the best available fixed rate. However, I’m somewhat leary of the card. They have a reputation for significantly increasing rates if you are late in making a payment (even one day) or have a recurrent record of running the balance above 50% of the credit limit. At one time, they were known to increase your rate if another creditor reported adverse information to the credit bureaus, however I believe they’ve ceased that practice. In short, is has a prime reputation among those who maintain a pristine credit record. However, those with lesser performance have a distaste for MBNA. This card isn’t a reward card, which is a consideration if you don’t intend to carry a balance. A “vanity” plus, is that they offer a “branded” card featuring the logos/mascots for a large number of universities.

– BofA: Higher rate and not (I believe) a rewards card. Now merged with MBNA. (In fact, the MBNA website features both logos). This card has different and less attractive terms. I have a strong experience with BofA, however, I’d leave it for later consideration as a student card.

– Amex Blue: I have little exposure to Amex. Clearly a prime “name plate”. Higher purchase rate.

—- You don’t mention Citibank. They feature competitive rewards and interest rates (not highest nor lowest). I mention them simply because our 17 year personal relationship has been the strongest of any with which we’ve been involved. They were the most accomodating when we fell into economic distress. I have very high regard for them.

I think over the next year you should cultivate a relationship with two card issuers — looking to start of on the strongest footing with each prior to graduation. I personally might recommend seeking out Citibank first and then MBNA after 9 mo.

As you say, it’s best to spread applications rather than make them all at once. It’s hardly a hard call, though, and others might advise otherwise. I’d recommend Citi or Discover as your first app., following in 2 mo with a 2nd app and another 3 mo w/ a 3rd app. with other issuers if you’re unsuccessful. I don’t advise rushing this. I’d exclude MBNA from your search for a initial card. Once you obtain an iniitial card, in your shoes I might choose to hold back for 6 months, establish some track record by carry a very modest balance (less than $100) month to month, and then go for MBNA — assuming that you’re looking to rigidly adhere to credit terms and balance discipline (and why wouldn’t you

Author: FaithNGrace
Posted: Tue Jul 11, 2006 12:37 pm
Post subject: What is the Best Student Credit Card

Thanks so much for all of the info. I didn’t mention Citi because I just recently got the mtvU Visa from them. I figured it would look better if I had another card from a different company. I think I can probably submit another application in about a month or two, I just wanted to figure out which one to try first. I think two cards will be more than sufficient to head back to school with. (At least, I hope so! ) I was leaning towards BOA because I’ve only heard good things about them. Good idea?

My friend got denied for the Citi mtvU card (couldn’t verify student status) and she has decided she doesn’t even want to bother with them again. I will pass along the info about the other cards so she can figure out which one she wants to try for. Right now she thinks she’s going to try BOA or AMEX. Are they more likely to refuse her since she got denied by Citi?