Credit Cards

How To Find The Best Student Credit Cards
Doug Smith

Defined Tag: Student Credit Cards.

Incoming college freshmen are inundated with offers for student credit cards as soon as they hit the campus. Credit card banks routinely blanket colleges with flyers, notices, and e-mails for too good to be true card rates and perks. Parents should have already discussed the pros and cons of bank cards with their high school students. Perhaps the teen was given a low-limit card, or a prepaid card, to learn how they work and to use it responsibly. College credit cards can be very convenient for new and existing students, but only if used wisely. Parents may even wish to choose and order the card before the student leaves for college.

Choose a student card that has a low spending limit. Sure, that's obvious, but often overlooked. A higher limit often means less responsibility when using the card. The first time your college student has a transaction declined on his low-limit card will be a lesson he will never forget. Don't fall for low or 0% APR (Annual Percentage Rate) card offers that tempt students with initial no or low rates, then balloon to double-digit interest rates within months. Be sure that the low-interest bank card you find is a fixed rate for the life of the card. Some cards offer reward points, bonus points, or cash back programs. Try to find reward programs that benefit your student at the university, such as cards that give cash back on gas or groceries, or that offer discounts at local merchants.

Spell out the specific uses of the student's card. Some university parents want their kids to use them for emergencies only. What constitutes an emergency differs between parents and students, so make a list of examples. Other families may want their college students to pay for books, room, and board with credit, but nothing else. If the student wishes to get a job to pay off any discretionary spending he makes, that is fine too, but not likely.

Parents should let the student know that they will be monitoring the card usage online! Any unauthorized or frivolous charges on the statement might be subject to discipline by the parents, including loss of spending privileges for a while. Parents can set alerts on the account to be notified by e-mail or text message when transactions higher than a certain dollar amount occur. As the child proves he can handle the financial responsibility, then less parental vigilance is needed on monitoring their student credit cards.

This article is Copyright 2009 by Doug Smith. All Rights Reserved Worldwide. Unauthorized Duplication Prohibited. For Entertainment Purposes Only. Not Intended As Financial Advice. Consult Your Own Financial Professional.