What should I look for in a credit card?

[demetriusalwyn]

Hey everyone, I'm a college student and I'm looking for a credit card, but don't know too much about them. What type of credit card would be best for me? For example, should I get one with a low interest rate or one with minimal service charges? I really don't know much about them, so any information will be a big help. Also, if possible it would be great to get one with sky miles rewards or something like that. I go to school far away from home so it's pretty often that I fly back and forth. The sky miles would be very useful! Thanks everyone!

[katebush]

If you're serious about getting air mile or sky mile rewards for flights you'll need to be able to switch almost all your spending onto the credit card for a start. Working out

http://www.comparecards.com/ (for the US) or http://www.credit-card-comparison-online.co.uk/ (for the UK) both have tools where you can input your average monthly spend and see how many airmile points you pick up from the various credit cards on offer.

However, as a college student I think that it's unlikely that you'll be able to get a really good reward card. Unless you've managed credit cards successfully in the past it's unlikely that your credit score will be high enough - maybe try to get a basic student credit card and wait a few more years for the rewards.

[NightStar]

You can check the credit cards link in my sig, but there are new laws passed now that says more care will be taken with credit card companies when offering students credit. You might have to prove income, or have someone co-sign for you. Air-line miles are good I would look that direction first since you said you do a lot of flying. A long term low interest card or a money back card would also be good.

You can check sites for:

Chase
Bank of America
Citi Bank
Capital One
Discover
American Express
National City Bank
HSBC
Pulaski Bank - This one is hard to get.

Anyway there are a few you can go to the web sites for.

If you don't have enough credit now, you might be stuck getting a secured card.

[The Wise Buck]

I've got a question for you I want you to seriously consider -

But First - It's obvious (as you're in college) that you're young. So, given that, have you considered just avoiding credit cards altogether? As for the convenience part of buying tickets, you can get a visa or master DEBIT card.

The attraction of Sky Miles is usually replaced by higher interest payments (usury) over time. In other words, if you become an avid credit user, it is very likely you will ultimately pay more in interest, service fees; many of which you aren't even aware of yet, than those miles ever add up to.

So, I am going to suggest that you consider a life WITHOUT credit cards - get a debit card for convenience - and be in the 1% of people who actually achieve financial independence.

Remember - credit cards aren't toys or gifts - they usually end up becoming one of the most destructive forces in people's life.

Go with a debit card. Although I know you will probably ignore this post, I felt a need to at least suggest a different option.

Best wishes,

Mike

[NightStar]

I use debt cards all of the time, that is all good and fine, but that does not get reported to the credit reporting agency and added to consumer credit reports.

Oh there is reporting systems like check systems, but other type of lenders use Experian, Equifax, and TransUnion - not chex system and the sort.

It is harder now for students to get credit cards with the new laws. They want proof of income, otherwise a student needs a co-signer.

I don't like starting students on credit cards, it is better if you save up say like $500 to $1,000 and go open a savings account and use that money to back an installment loan. And just pay as agreed for the full term, and when you are done use the savings to open another installment loan, and get like 2 or 3 of them before you actually apply for credit cards.

Good credit really does matter if you can do it right, the point is to not need it, but have it in case of emergencies. The better your score, and the less you need it, the more better offers you see from lenders.

You need credit if down the line you want to buy a car or get a mortgage loan, it is very hard to get approved for major loans if you have not put in time to build credit.

I even recommend if you have a parent, that they add you as an authorized user on their cards, don't use the card, but ride on it, to benefit from their good credit. Just make sure the account has long established history, high credit limit, low balance, and have never been late.

[McneriFinance]

Originally Posted by The Wise Buck

I am going to suggest that you consider a life WITHOUT credit cards - get a debit card for convenience - and be in the 1% of people who actually achieve financial independence.
Mike

Mike with all due respect it is the lack of discipline of people that makes it seem like credit cards are BAD. No they are not. Stop scaring this poor student.
You can get a credit card and learn discipline. If you do not get a credit card, the society still runs on credit. Cable, Mortgage and so on.

Try one of the community banks and pay off your balance. Better still just read Wisebread and my personal finance blog and use your card wisely.

[flipchick1127]

Having a credit card is not necessarily a bad thing. Both my husband and I have our own credit cards and we pay them off in full every month. Neither of our cards have any sort of annual fee and both cards get cash back/rewards. My husband has the Discover More card (he started off with the Discover Student card and they upgraded him to this). It gives us 5% cash back on revolving categories like groceries, restaurants, etc. I have the Chase Freedom card which gives me 3% cash back on my three highest everyday spending categories. Both of our cards have been great for us and we have received many rewards from them. Since we pay off our balance in full each month, then we never have to pay interest on them. Both of our credit scores have improved since getting them.

If you are seriously looking for a credit card, I would look into the ones I just mentioned first. However, ONLY get a card if you will be paying if off in full each month. If you are even slightly tempted to carry a balance, then do not get one. Depending on your age, you may need a cosigner and proof of income. However, if you are responsible with your money and you have a job this will not be a problem.

Good luck making your decision!

[kenyantykoon]

a good reputation and one that doesn't have hidden charges tops the list. I use a debit card and this keeps me in my current debt free state

[GameOver]

I am also a student. I'm currently using a debit card that acts as a credit card (i.e. cannot go into debt)- I find this effective in saving money and avoiding unnecessary interest charges. If however you are looking for a credit card for the purpose of getting credit, I would go with something with an interest free period (e.g. 30 days) and as long as you can pay it off before this period ends you can end up actually benefiting (cost wise) from the credit card.

[Advice4u]

There are a few things to look for:

- Expandability. Look to make sure the creditor will extend better offers to help you build higher limits down the road

- Credit Reporting. Make sure the cards report to all 3 major credit buearus

- Low APR. Obviously the most important if you plan on holding a revolving balance is low interest. Optimally you want to keep a 0 balance month to month.

You can use credit card websites that give you access to compare the cards. Websites like comparethecards.com are a great place to start