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Student Credit Cards & Cards for the "Credit Challenged"

Looking back 8 years ago, I recall being 18 years old and wanting to build my credit and earn hotel/airline points, however I can remember how difficult it was to get a credit card when I had almost zero credit history. Sure, I had my own checking account since I was 16 from Bank of America, yet that alone wasn’t enough history to get a credit card. Instead, each time I applied I got turned down! I was frustrated by this, but then, finally a credit union offered me my first credit card and then I started to apply for other credit cards and now I’m almost a pro credit card churner, opening and closing accounts all the time for points and miles.

Therefore, for those readers who are just starting out, here are a couple of options for you. Most of these won’t earn you points/rewards, but it’s a way to start. Then in the future, once you’ve built some credit (in 6-12 months) then you can try to get some of the better point earning cards.

1)      Visit YOUR bank and see if they have a student visa. If you bank with a Big National bank, consider going to a smaller credit union. Often times they are willing to give members credit cards with low limits.

2)      Consider a Secured Line of Credit: A secured line of credit is a credit card that you secure with an initial deposit. This means if your credit line is $1000, the consumer gives the bank 1K to hold onto. Often times the bank will refund this money after 12 months of making payments on time.

A number of banks offers Secured credit card, be sure to reviews annual fees and maintenance fees. Every credit card has a different fee structure. Also be sure the credit card reports to the major credit bureaus, this way your credit history is growing.

Applied Bank® Secured Visa® Gold Credit Card

Platinum Zero® Secured Visa® Credit Card from Applied Bank®

National Express® Secured Visa® Credit Card

The First Progress Platinum Elite MasterCard® Secured Credit Card

The First Progress Platinum Select MasterCard® Secured Credit Card

 3) Consider a Student Credit Card: Student credit cards are for students, (Discover does have a card for non studens too) many banks have credit cards with low credit limits for students who are just starting to build credit. Some offer award programs, others do not. My first student credit card was a discover card. Although the discover card has changed and recently revamped itself, Discover still offers credit cards targeted at college students and offers an award program.

There are many student credit cards available, however Discover is the only one I can personally vouch for, and because it is the only student card I ever had. Discover still offers the 5% select cash back rewards that changes every couple of months and 1% back on everything else on the student card. Although this bonus is returned to the consumer in the form of cash, Discover has a great portal where the cash back reward can be multiplied and turned into gift cards, turning $20 into $40 and possibly even more!  Although you cannot see the options until you’ve signed up for a card, take it from a Discover card holder when I say there are TONS of options! Some Partners include Shell Gas, Enterprise rent-a-car, Lowe’s, GAP, DSW, CVS, AMC theaters, Hyatt, Carnival Cruise Line, Best Western, Outback Steak House and hundreds more!

discover-it

 Discover is just one of many student options out there, so before making a decision, weigh your options. Yet, if you’re a points hoarder like me, the Discover It™ for students is a good entry level card.

Hope this helps my fellow students and young readers! Please feel free to ask any questions you may have. I might have an answer or may be able to point you in the right direction! 

 

Comments

#1
Ari February 19, 2013 at 03:17 pm

I just recently turned 18 and applied for the BOA student card (cash back) and the Citi Student card (cash back)

I was aprooved for 1,000 dollars with each card, and I will pay in full every month.

  1. How much of the avaible creddit should I utilize?

  2. How many months do I pay off befoer my credit score is high?

  3. I want an Amex card, your tips?

And anything else you could add....

#2
Rocky February 20, 2013 at 12:22 pm

@Ari

Ari - It's better to have a zero balance then any balance, for each time you have any balance on your credit card it's reported to the 3 major bureaus, and as you use your card more you'll have a higher debt-to-income ration and you'll be closer to being maxed out on your debt. If you spend 500 on both cards each month it will appear as though you're utilizing 50% of your credit and you only have 50% free. Therefore it's always best to use them enough to show the banks you're trustworthy, but not enough to max out your limits. and I stress ALWAYS pay them off each month, NO MATTER WHAT!

2) credit scores are based on a number of different stats. These include items like length of credit history, even to this day I have "negative marks" or neutral marks, because the longest credit cards i've held on to are less than 10 years and most of my credit cards are 4 years or less. Also Number of marks on your credit (how many times your credit has been checked) Credit-debt ratio, type of credit used (credit cards, home loans, student loans etc) and payment history. For a better break down see here (http://www.myfico.com/crediteducation/whatsinyourscore.aspx)

3) AMex cards are not the easiest to get. I believe I was 20 by the time I got my first card, and it was one of their cards aimed at those who don't have excellent credit. I wouldn't expect to get a Gold Rewards card any time soon. Start out with the Blue Reward card and establish History with Amex, then after a year or so you could probably upgrade

hope this helps! and good luck

#3
Ari February 20, 2013 at 01:03 pm

Thanks for the info I appreciate it

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