What are the best credit cards for college students with no credit history? It’s a question college students who are trying to establish credit for the first time often have to deal with. The old saying “Youth is wasted on the young” has always seemed to apply to how young people view and spend their money. However, it is of paramount importance for you, as a young person to start developing and maintaining a good credit history.
There exist in the current credit card market, providers who recognize how difficult it is for young people, especially students, to acquire a credit card due to their lack of credit history. They have developed products to reward those who sign up for them, ranging from free or subsidized travel to money and entertainment opportunities.
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This article will highlight three (3) of the most sought after credit cards for students with little or no credit history whatsoever.
1. Citi Forward for College Students
This is one of the most student-friendly credit cards available in the market today. The card is designed to reward you for the activities you spend your regular day doing-eating at restaurants, buying books or music or watching movies. The beauty of the Citi- Forward is that you earn up to five times the points you would earn for every dollar you spend on the above-mentioned activities, which currently also applies to Amazon.com purchases. Every time you pay your bill on time, you receive 100 thank you points.
When you sign up for electronic statements, you receive an extra 1000 bonus thank you points. The maximum number of thank you points earned per year is 75,000 and given that they are 5X points, translate to a cool $15,000. It is important to note that the card has a foreign transaction fee of 3%, therefore it would be prudent to use this card when in the US, or to avoid making on-line transactions that would require you to pay in foreign currency.
There are several ways to redeem your thank you points: there is a wide variety of products available on the Thank You website which include gift cards, statement credits, cash back, you could redeem your points for air travel or even get a cheque to clear some of your student loans. You will be required to either redeem your points (at 1 cent per point) through the Thank You portal or contact the credit card provider directly to benefit from the last two product options.
For those of you who would be interested in getting higher returns, another option would be to accumulate your Thank you points until you qualify for the Citi Thank You Premier card.
Once that is done, you could transfer your Citi Forward Credit card points to your Premier card where you could then redeem your points at 1.33 cents per point, using it to pay for any air ticket you may purchase.
2. The Discover Student Card
This credit card is a good option for students who do not intend to travel out of the country. It is widely accepted within the United States, although services are available in a few international countries. In cases where it is accepted and you need to make foreign currency payments, no foreign transaction fee will be charged. For every first purchase made within three months of signing up, you will receive a $20 cash back bonus.
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Discovery offers a 5% quarterly category bonus, which is a quarterly product option category, where for every $1 you spend on either gas, restaurants, movies or theme parks, you will earn a 5% cash back. You will be required to register for this bonus in advance, and there is a limit to how many points you can amass.
In cases where your purchases have surpassed $3000, you will receive a1% cash back except for those products that will be in the categories earmarked to earn the 5% cash back for that quarter, purchases at discount stores or warehouse clubs. For those unable to exceed the $3000 purchase within a one year period, 0.25% cash back will be rewarded. There are no other point earning cards or miles issued by the Discovery credit card provider.
Discover Cash Back bonuses can be redeemed for gift cards, cash back, statement credits or other products available on the Discover website.
3. Capital One Journey Student Card
This is a simple credit card where all purchases earn you 1% cash back per dollar spent. You will receive an extra 0.25% cash back for paying your bill within the preferred time. You will not be charged for foreign transactions. It however has no sign-up bonuses or product categories.
Although these credit cards comparatively offer fewer bonuses for transactions done than other cards in the market, it is important to recognize that one has to have a credit card history in order to enjoy these benefits.
For students who generally have little or no credit history, your utilization of these cards would be the best and most cost-effective way to develop a credit rating that other banks could use to assess your eligibility for the more mainstream credit cards in the future.
As a student, it would be prudent for you to consider applying for a college credit card then charging between 20-30% of your credit line and paying the entire balance through your monthly payments.