Going to college has taken a rather drastic change in recent days, with many students having to take classes virtually. Whether in-class or virtual, college students will have considerable expenses as long as they are going to school. One way to help pay for the large bills is to get a student credit card. Many companies offer this type of credit card. However, you need to take the time to discover which is the best student credit card for you.
Look at the Interest Rate
You are apt to hold one or more credit cards while in school. So, it is important that you try and get the best interest rate that you can. The interest rate only matters if you are going to carry a balance on the card. If you pay the bill in full each month, there will not be any interest charged. Interest rates typically range from 14.99% to 26.99% annually.
Cash Back Options
Getting some of your money back in the form of rewards could help you save some money. Each card will have its benefits, so you will need to decide which cashback options you want. Rewards include getting cash back for gas and dining and up to 4% back when you use Lyft. Many of them will give you 1% (or more) on all other purchases.
Some student credit cards will also give you between 2 – 5% back when you make purchases at the grocery store. You can also find better credit cards that will give you up to 5% back on travel costs. Several student cards will also give you up to 3% back on drugstore purchases. Some student credit cards will also give you a percentage back when you buy home furnishings and make purchases from a wholesale club.
Carrying a Balance
With interest rates as high as they are on credit cards, students need to realize that unless they pay the balance off each month, that getting out of debt will take much longer than if you had paid cash. It also means that you are paying much more than you realized for any item you buy – whether it is on sale or not.
Keeping your debt (how much you how) to credit (how much credit you have) ratio low (less than 30%), and paying your credit card bills on time, will enable you to get better loans later on – after you graduate. People who manage their finances well will be able to get loans for cars, houses, etc., at better interest rates, larger amounts, and better repayment terms.
Late Payment Fees
If you make a late payment, most credit card companies will charge you a fee of $25 to $40 each time. Some of them will let the first late payment go, but it will only be once. A credit card with this feature could be a good option if you are not used to paying bills.
Credit card companies know that most students going into college are not going to have much of an established credit score. If you can get credit before going to college, it will be to your advantage. This will possibly enable you to get a higher credit limit and a better interest rate. Two important aspects that a card company will look for is whether or not you pay your bills on time and how much income you have when you apply.