Credit cards for bad credit are popular among the working force. This is because they can afford to pay for them. That does not, however, mean that students do not need one. It does not also mean that these cards are not good for students. In fact, students can use credit cards to build a solid credit history.
The most important thing is how they use the card. If a student uses his or her credit card well, it has lots of benefits. Aside from the card helping them to build solid credit history, it can also help them to make huge items when they do not have the cash readily but they are sure they will get it later.
The problem is that when students want to get credit cards, they struggle to qualify for one because they have no credit history. Fortunately, credit card companies have developed credit card packages that are designed for students who need cards. These cards are lower credit score requirements and their rewards if any are developed to benefit the average college student.
Although these cards are designed for students, you need to take caution when they want to apply for these cards. Below are guidelines for students who are considering credit cards.
1. Use your card to build credit history, not debts
The truth is that you will either build debts or credit history with your card. You cannot have both. Do not spend more than you can afford to pay back. It is also important to pay your balances before the due date so that you do not carry those balances to the next billing cycle.
Your credit card becomes expensive if you keep on carrying your debt to the next billing cycle. When you make regular payments, you will be able to build a solid credit history. When you use a credit card, you may be tempted to make purchases you have not planned for simply because you can buy it at that moment. If you have that problem, it will be best not to carry your credit card along to places you will be tempted to use them on things you do not need.
Aside from making purchases, another thing that can make you spend more money from your credit card is cash advance. You can use your credit card to get a cash advance from the ATM. Although this may sound convenient and nice, it is not recommended if you want to be cautious with your finances. Getting a cash advance is more expensive than using your credit card to make purchases.
Cash advance attracts certain fees and the rates are also high. If you need funds, you should exhaust other options before thinking of a cash advance. You can consider getting funds from your family or friends. There are other loan types as well.
2. Do not use your credit card to pay your tuition fee
Credit cards have high interest rates. Credit cards for people with bad credit scores are even more expensive since credit card companies think that it is risky to lend to such people. If you need funds to pay for your tuition. You should apply to the federal student loan.
These loans are backed by the government and they attract lower interest rates. Federal students loan can also provide education-related tax deductions. Credit cards are suitable for short term financial solutions. Tuition is a long term debt and using your credit card to pay your tuition makes the loan very expensive.
3. Consider secured credit cards
You can start your search for a credit card by searching for an unsecured card. With unsecured cards, you do not need to make a cash deposit and the line of credit is high. Unfortunately, it is difficult to get unsecured credit cards when you have a bad credit.
It is worth trying since there are credit card companies who offer unsecured cards to people with bad credit. If you try and you are unable to get one, it will be better to opt for secured cards. These cards are easier to access since you will be required to make a deposit. The deposit depends on your creditworthiness.
4. Look for cards with no annual fees
As a student, it is really important to save as much as you can. Saving includes saving cash in fee payments for your credit card. One of the common fees that are associated with credit cards is annual fees.
Annual fees are a charged as a percentage. Some credit card companies waive this fee for the first year when you sign up.
Fortunately, there are companies that do not charge this fee at all. It will be better to choose a card that does not come with annual fees. Some card companies also waive fees such as late fees and foreign transaction fees.
You can also check if you will get a credit card offer that allows you to do away with late fees and or foreign transaction fees along with the annual fees.
5. Avoid using a co-signer
A co-signer will sign your credit card contract with you. They will be responsible for your loan even if you are unable to pay. It is difficult to get a co-signer but even if you are likely to get one easily you should reconsider your decision.
If you are unable to pay up your balances, your credit card company will collect the money from your co-signer. Your co-signer’s credit score may be damaged if you are unable to pay up your balance. This situation can destroy the friendship you have with your friend or family member who signed as your co-signer.
It can be difficult to choose a credit card since there are several options. We have compiled a list of the best offers.
1. Discover it Student Cash Back
There is no annual fee when you sign up for this card. The required credit score for getting this card ranges 630 to 689. You will enjoy 5% quarterly cash back rewards on purchases made at restaurants, gas stations, grocery shops, and Amazon.com.You will also enjoy 1% cash back on all other purchases. There is a reward for students who perform exceptionally. They get $20 in statement credit each year. This reward is available for students who have a minimum GPA of 3.0. The APR charged on this card ranges from 14.99% to 23.99%. The intro APR is 0% for six months and the balance transfer fee is also 10.99% for six months.
When you make late payments for the first time, there is no n penalty. You will also receive free social security number alerts. There is a feature that allows you to freeze your account to stop new purchases or payments.
2. Discover it Student Chrome
This card has features that are similar to the Discover it Student Cash Back card. You will need a credit score that ranges from 630 to 689 to apply for this card. The APR charged on purchases ranges from 14.99% to 23.99%. When you sign up for this card, you get to enjoy 2% cash back on purchases at restaurants and gas stations up to $1,000 in combined purchases for every quarter. You will also 1% on all other purchases and this reward is unlimited.
For students with GPA 3.0 or higher, they get $20 in statement credit for 5 years. There is no annual fee and the intro APR on purchases for the first 6 months is 0%.
3. Journey Student Rewards from Capital One
This card is another student card offered by Capital One. The annual fee charged for this card is $0 and the APR is 24.99%. This card offers you a 1% cash back on all purchases. There is the possibility of increasing that percentage to 1.25% when you make on-time payments for the month. Apart from waiving the annual fees, there is also no foreign transaction fee. This card helps you to build good credit history. Once you make regular payments, the company will report to the credit reporting bureaus and this can help you to build a good credit history.
If you make regular payments for the first five months, you will get the opportunity to increase your line of credit. You can also monitor your profile with the free CreditWise app. You also get to enjoy 0$ fraud liability should your card get missing.
Capital One has an app that helps you to manage your account. This app is available for all students who sign up for this card.
4. State Farm Student Visa Credit Card
This card issued by State Farm is another card that is worth considering by students who have bad credit. There is no annual fee when you apply for this card. They also offer several rewards on b purchases. When you spend $2 on eligible purchases, you will receive 1 State Farm Loyalty reward point. You will earn 3 points for every dollar you spend on insurance premiums. This is limited to $4,000 a year. The APR ranges from 12.99% to 19.99%. There is no credit score limitation for this card.
5. Deserve Edu MasterCard for Students
Money Magazine named this card the best students credit card in 2018. Cardholders enjoy 1% cash back on all purchases. The regular APR on this card is 20.49%. There is no annual fee charged on this card. You will also not pay for foreign transactions. You will need a credit score that ranges from 630 to 850 to qualify for this card. This card is great for students with fair credit scores. You can pay a late fee up to $25.
Before you get this card, you will need to provide proof that you are currently enrolled in an educational institution. You do not need to present a co-signer or security deposit.
This card can help you to build your credit. There are several other benefits that come with this card. You will enjoy protection against identity theft. You will also enjoy price protection, travel assistance services, extended warranty, and car rental collision damage waiver.
This card is ideal for students without a credit history, especially international students. If you get this card, you should sign up for the Amazon Prime Student membership since you will be reimbursed up to a lifetime total of $59 for the subscription fees.
6. Bank Americard Credit Card for Students
The APR charged on this card ranges from 14.99% to 24.99%. You will enjoy 0% introductory APR for 15 billing cycles. You will also enjoy 0% APR on balance transfer for 60 days. After the 60 days, the balance transfer rate is 3%. Make sure that you pay your balance before the regular APR sets in.
7. Green Dot Primor Visa Gold Secured Credit Card
You can access between $200 to $5,000 in a line of credit when you apply for this card. There is a fixed APR of 9.99% on this card. You will not pay any application or processing fee when you apply for this card. There is no minimum credit score requirement for applicants who want to apply for this card. This card can help you to improve your credit history. Once you make regular payments on this card, you are good to go.
You do not need to worry about penalty rates when you apply for this card. You should note that you will make a cash deposit before getting this card. This cash deposit will depend on your credit score.
8. First Progress Prestige MasterCard Secured Credit Card
When you complete the application for this card, you will submit a cash deposit along with the application. This cash deposit is fully refundable and the amount will depend on your creditworthiness. This card company reports to all three credit reporting bureaus. This means that there is an opportunity for you to improve your credit history by making payments on time. There is a variable APR of 10.24% on this card.
9. SunTrust Secured Credit Card with Cash Rewards
With this card, you will earn unlimited cash back on purchases. You will earn 2% cash back on gas and grocery purchases. You can earn up to $6,000 each year. You will also earn 1% cash back on all other purchases. The annual fee on this card is 32%. When you use this card for 12 months, Suntrust will evaluate your account and if you are eligible, you will be upgraded to the SunTrust unsecured card.
10. Golden 1 Visa Platinum Rewards for Students
This card is designed for members of the Golden 1 Credit Union. Membership in this group is open to people who live in California or people who are related to members of this group. This card allows you to earn a lot of rewards on gas, grocery, restaurant purchases. You will earn a 3% cash back on these purchases. You will also earn a 1% cash back on all other purchases. There is no annual fee when you apply for this card.
11. U.S Bank College Visa Card
The U.S Bank College Visa Card is another credit card option for students with poor credit scores. There no annual fee when you sign up for the card. They conduct a credit check that determines the interest rate that will be charged on your card. The general interest rate ranges from 11.99% to 20.99%. Although there is no annual fee, the card attracts a 3% foreign transaction fee. The 3% is charged on the transacted amount. You will receive free access to your account and free mobile alerts.
12. Wells Fargo College Cash Back
Wells Fargo has a credit card for college students. When you sign up for this card, you will get an intro rate that ranges from 5.9% to 13.9% for the first six on balance transfers. The standard rate ranges from 11.15% to 21.15%. Wells Fargo charges 3% on balance transfers, 5% on cash advances, and 3% on foreign transactions.
Fortunately, Wells Fargo does not charge an annual fee for this card. You will receive a 3% cash back on the purchases you make at the grocery shop, gas station, and drugstore for six months. You will also earn 1% cash back on other purchases.
13. Sallie Mae’s World MasterCard
This card is issued by Barclaycard and it is ideal for students who have student loans. The company allows you to link your student loan to the credit card rewards program. This helps you to pay your student loan faster. You do not pay an annual fee when you use this card. When you sign up, you will receive 2500 points which are equivalent to $25 when you use your card in the first 90 days. You will earn 5% cash back rewards on grocery and gas purchases up to $250. You will also earn 5% cash back rewards on purchases you make at bookshops up to $750. You will also earn 1% cash back on all other purchases.
The good thing is that the rewards do not expire. The interest rate ranges from 13.99% to 22.99% and it depends on your credit score. There is a 5% cash advance fee and a 3% foreign transaction fee.
14. East West Bank College Rewards
This card offers an average rewards program and it does not attract an annual fee. The APR on this card ranges from 11.99% to 20.99%. East West Bank gives you 1000 Elan points which is equivalent to $10 for signing up. You will also receive 1% cash back on purchases. If you have an East West Bank checking account, you can use any ATM without paying the ATM charges.
15. Comerica College Rewards
When you sign up for this card, you will receive a $10 sign up bonus. You will not pay an annual fee when you use this card. You will also 1% cash back rewards on all purchases. The interest rate ranges from 11.99% to 20.99%. The foreign transaction fee is 3% and the cash advance fee is also 4%.
You should go through the offers and choose a card that works well for you. Even after getting a card, make sure it helps you to build your credit score.