The process of picking a credit card can be overwhelming, frustrating, and can frankly make you want to run and hide.
But the bottom line is that if you want to eventually be able to do things like buy a house or take out a loan without having an overwhelming interest rate, you will need to build up your credit score. The best way to do this is to get a credit card and make your payments on time to prove you are a responsible cardholders. There are certain credit cards for college students that are designed to help first-time credit cardholders learn the ropes.
There are hundreds of credit cards out there targeted towards millennials and it can be overwhelming.
With plenty of credit cards for college students out there, we cannot tell you what card is right for you, that depends on the kind of purchases you are going to make, and the rewards that are important to you.
To help, we can explain to you how to compare cards, explain some vocabulary, and point you in the right direction.
Credit Card Rewards
When you first start shopping around for cards, we suggest thinking about what rewards you are interested in.
The rewards on general purpose cards are either cash back and miles. If you plan on traveling than a mileage card could be right for you. If you are interested in cash back you can consider cards that offer a flat reward rate across the board such as the Chase Freedom Unlimited Card.
There are also cards that offer rotating rewards on certain purchases, like the Chase Freedom. There are many cards that offer rewards like these. When you are ready to start comparing cards we suggest nerdwallet or comparecards. These sites are easy to understand and make comparing cards easy.
There are also brand specific cards that offer rewards specific to certain retailers like Victoria's Secret and Gamestop. If you are a repeat shopper at a store that offers a card, this can be a good way to begin building your credit as well.
Credit Cards For College Students Comparisons
So you decided what rewards are important to you. Now how do you understand what the comparisons mean? When you look at nerdwallet, the card details are broken down for you. You will be given the card APR. APR means annual percentage rate and on most starter cards, the APR typically runs between 15% to 25%.
This means that if you carry a balance from one month to the next, you will be paying interest on the amount based on your APR. Our advice, pay your full balance every month, and then you won't have to worry about how high your APR is.
PRO TIP: If you are planning a large purchase, many cards offer to wave the APR the first year, giving you time to pay off your balance without raking up huge interest fees.
The next category you should compare is annual fees. There are many cards out there that offer no annual fees. If you are looking for your first credit card, these would probably be best. However, the cards that offer the best rewards can have annual fees for $100 or less.
There are cards out there with considerably higher fees, like this one for $450. If you are looking at a card with annual fees, you want to make sure that the rewards you are getting will at least allow you to break even. Do the math.
We hope that this advice helps when deciding on the credit card that is right for you! These credit cards for college students are a good place to start.