Q: I'm a student and I'm trying to build my credit. But I need a credit card that isn't outrageous on fees and reports to all three credit bureaus. Any suggestions?
Lenders have faced some criticism for aggressively marketing student credit cards, and for good reason. Swapping a completed credit card application for a T-shirt at the campus center was supposed to go away when the Credit CARD Act became law. Instead, banks and marketers found plenty of loopholes to keep the lucrative practice in place.
Student credit cards aren't inherently bad, but you need some guidance to use them properly. Plus, when you compare credit cards online, you'll almost always find better deals than those you'll see on folding tables at off-campus events. Consider a few of these options from reputable lenders with features that support your quest to build a sound credit history:
Citi Forward for College Students This version of Citi's rewards credit card offers incentives for paying your bill on time and for staying under your credit limit. Along the way, you can earn ThankYou points for common campus purchases, like dining at restaurants, books, movies and music.
Discover it for Students Discover's involvement in the educational loan business gives it an advantage when it comes to offering student credit cards. This card offers a rewards program worthy of some of the best credit cards. When you enroll each quarter you can earn up to 5 percent cash back on purchases from Discover's rotating list of featured categories. But perhaps best of all, this card comes with no annual fee, no foreign transaction fees, no over-the-limit fee and no late fee on your first late payment.
Research suggests that today's college students depend on prepaid debit cards and checking account-linked cards more than on credit cards for their daily purchasing. Staying out of debt is a great financial habit to start, especially if you're paying off significant student loans upon graduation. A student credit card can give you the head start you need to qualify for better rates on auto loans and mortgages later in life. Unlike debit cards, credit cards report your monthly account balances to credit bureaus. The more history you've got with lenders, the better.