Going to college involves a number of firsts in the lives of students. For many, it's the first time they are living away from home and taking control of their financial lives, including obtaining their first student credit card. College is where many people establish and build their credit history, an enterprise that will have a profound impact on their ability later on in life to purchase a house and other major items.
However, a student's ability to get a credit card wasn't always a slam dunk. That's due to the Credit CARD Act of 2009. Prior to the Act, students would often encounter card issuers on campus, hawking credit cards sweetened with free gifts such as clothing and Frisbees. Campus mailboxes were frequently stuffed with flyers offering credit cards.
The Act outlawed a number of abuses having to do with interest rates, payments and fees that had the effect of making cards less profitable for banks. This, along with tight credit, made it hard for people with scant or poor credit histories to qualify for credit cards.
Eight years have elapsed since the start of the Great Recession, and the credit card market has loosened up quite a bit. Today's students have a pretty good shot at acquiring a credit card. For one thing, students can get pretty good offers from issuers, including generous rewards along with other benefits. Also, there are a few ways to get a credit card:
- Qualify on your own by showing proof of income
- Find someone to co-sign your credit agreement
- Be designated as an authorized user on someone else's account
- Get a secured credit card, in which your bank account collateralizes your credit line
Banks started to transition from reluctant to enthusiastic card issuers in 2014, and this certainly helps students obtain full-featured cards. In fact, many issuers offer special cards for students. A good card might provide a number of attractive features, including:
- Cash back on purchases, with bonus cash back at places where students are likely to spend money, such as restaurants
- Double cash back as the introductory year ends
- Special cash-back bonuses based upon their grade point average
- No annual fees and low late-payment fees
- An introductory period of 0% APR
- Bonus points for signing up and/or for spending a certain amount on purchases within a fixed time period
What Now, College Students?
As a good student, it makes sense to research the best credit card deals available. If money is tight, look for a cash-back card with a low APR. It would be ideal if a card gave you a good cashback deal on school supplies, though.