While the Credit CARD Act cut down on a lot of the shady marketing practices credit card issuers used to target college students, there are still a plethora of cards out there for the campus crowd, and wading through them can be a chore. We turned to Amber Stubbs, managing editor of the credit card comparison site CardRatings.com, and Doug Miller, senior analyst for banking and cards at market research firm Corporate Insight, to help us identify some of the cards out there today that offer the best value for students.
One note: Keep in mind that the interest rates listed here are for the best possible credit, and they’re all variable, so they can fluctuate with the prime rate.
Both our experts had good things to say about the Citi Forward Visa Card. It’s got a decent APR of 12.99 percent for students with the best credit. (Overall, APRs for student cards tend to be higher than for regular credit cards.) It’s also tied into Citi’s “ThankYou” rewards program and it offers the same earnings of one point per dollar spent on all purchases. In addition, cardholders earn five points per dollar spent on restaurants, movies, books and music purchases — categories which might be of interest to students. You also get access to a credit education site within Citi designed for students.
Stubbs suggests the Discover Open Road for Students Card because it has a 13.99 percent APR for students with top-tier credit along with a souped-up cashback rewards program. Discover’s standard cash back earnings rate is 1 percent; in addition to that, cardholders can earn 2 percent back for up to $250 worth of gas and restaurant purchases each billing period — making this a good possibility for students with a long commute or who road trip frequently. There’s just one hitch about this card that low to moderate chargers should be aware of: That 1 percent redemption rate only kicks in after you’ve spent $3,000 in a calendar year. Before that, you’re looking at a paltry 0.25 percent.
Miller also liked the Bank of America Student Platinum Plus Visa Card. While it doesn’t come attached to a rewards program, this card offers identity theft protection insurance for free while the cardholder is a student. Although we typically don’t recommend that people sign up for these kinds of services, college students are particularly vulnerable — a combination of changing addresses frequently and a lack of awareness about the importance of shredding or destroying documents with personal information make it easier for them to become victims of identity theft. The card has a middle-of-the-road APR of 14.24 percent. It also offers access to a financial education site geared toward students.
Miller highlighted the Capital One Journey Student Rewards Visa Card. This card does have a higher-than-average APR of 19.8 percent. “But where it excels is in its cashback rewards,” he says. In addition to 1 percent on purchases, as long as a student keeps his or her account in good standing, Capital One adds an extra 0.25 percent in rewards points each month. Like Citi and Bank of America, Capital One also has a dedicated site for its college students with advice on managing finances away from home.
For students that are unable to get an unsecured card, Stubbs suggests the Citi Secured MasterCard. Like most secured cards, it has an annual fee and a less-than-stellar APR: $29 and 18.24 percent, respectively. The upside, says Stubbs, is that the bank puts your security deposit into an 18-month CD instead of a regular savings account, so it earns more interest. Also, if your account is in good standing after a year and a half, Citi will review it to determine if your account can be converted to unsecured status.