Is a Student Card a good idea for a first credit card?

Question

I just graduated high school & about to go to college, & I received something in the mail about a Student Card. Would this be a good idea for a first credit card?

I'm new to this whole credit card thing so also, is there anything I should be looking/watching out for & any tips/advice would be nice. I don't want to be taken advantage of/scammed.

Lastly, are there any other ways to build your credit besides using a credit card?

Answer 1

student credit cards are good but generally have higher interest rates. you do not have to worry about the higher interest rates if you plan on paying in full every month.

here are a couple student credit cards i recommend

Citi® mtvU™ Platinum Select® Visa® Card for College Students

http://www.cardlister.com/CreditCards_de...

Fidelity Investments® 529 College Rewards® American Express®

http://www.cardlister.com/CreditCards_de...

if you would like a credit card with lower interest rates I recommend these two credit cards....

Blue from American Express®

http://www.cardlister.com/CreditCards_de...

Citi® Platinum Select® MasterCard®

http://www.cardlister.com/CreditCards_de...

Answer 2

Yes, absolutely, a student credit card is a great first credit card.  In fact, there's one student card in particular I wish I could get (but I'm not a student) -- the Citi mtvU card.  It's the only credit card available that pays 5 percent rewards at restaurants, book stores, video stores, and movie theaters.

Here's what you do to build your credit with credit cards (I'll get to other ways in a minute):

1.  Find the student rewards card(s) that will pay you the most for your normal expenses (I'll explain how in a second)

2.  Funnel most/all of your normal expenses through your student rewards card(s) without max'ing them out

3.  Always pay your monthly balance off in full and on time.

That way you'll:

1.  Build your credit quickly (based on responsible utilization of your lines of credit)

2.  Avoid interest and fees

3.  Earn great rewards

You can use this rewards calculator to find which student rewards card (or combination of cards) will pay you the most in rewards for your normal expenses:

http://www.creditcardtuneup.com/?card_ty...

In addition to getting (and responsibly using) a couple student credit cards, there are some other things you can do to build your credit, but first let me explain what makes up your FICO credit score.

FICO scores range from 300 to 850.  So there's really 550 points possible.  Here's how much of those 550 points are at stake for various kinds of credit usage behavior:

- About 35 percent is ‘payment history’ - Paying your credit cards on time and making at least minimum balance payments (though I recommend always paying them off in full each month to avoid interest)

- About 30 percent is ‘amounts owed’ - How much of your available credit are you using?  The more of your available credit you have tapped, the less of this you get.  By paying off your cards in full every month and not carrying a balance, you've done most of what you should have to do to earn these points.  If you're really interested in "polishing" your FICO score (e.g. just before getting a mortgage), you may choose to pay your cards early or utilize them less.  Personally, I just have about 7 credit cards, but only use a fraction of the available credit on them.  That's why I'd recommend getting at least a couple credit cards.

- About 15 percent of your FICO score is ‘length of credit history’ -- You'll start building this as soon as you get your first credit cards or loans.  Also, don't close your credit card accounts.  Keep them open for the length of  credit history.

- About 10 percent of your score is ‘new credit’ -- i.e. Applying for new lines of credit (cards or loans) chips away at these points.  Each time you apply for a credit card your FICO score takes like a 10 point hit, but the impact goes away gradually and is totally gone 12 months after you applied for the card.

- The last 10 percent of your score is ‘types of credit’ -- You can can earn more of those points by having credit cards plus other forms of credit such as department store cards, vehicle loans, a mortgage, overdraft protection on your checking account, etc.

That last bullet point is what I think you were asking for when you asked for "other ways to build your credit besides using a credit card".  As you can see, doing those other things besides credit cards only matters for about 35-45 points out of your total 550 possible FICO points.  

It's pretty easy to get a couple department store credit cards, so you should definitely do that.  Overdraft protection on your checking account is easy (if your bank offers it).  I wouldn't go out of your way to get loans that you don't need, but having them and paying them responsibly helps your FICO score a little.

I hope that answers your questions.

Answer 3

Only go with cards from major banks-preferrably your own. My son has checking and a card with Wells Fargo for instance. I don't like him to use it but its been great if hes between paychecks and has to pay his tuition or such. He's religious about paying on it and its easy to payonline by transferring from his checking. He's building credit too. You don't really need to use it much but it can be a good thing-esp with excellent habits.

I started with a Dept Store card, then co signed on a car loan with my Dad for a car-

Answer 4

YES IT IS PREFECT, BUYING A CAR IS ALSO A GOOD WAY OF BUILDING UP CREDIT.

Answer 5

The Discover Student Credit Card is a great option for your first credit card.  There is no annual fee, low apr, and great rewards.  Discover also makes sure you dont get screwed with credit by starting you off with a lower limit and gradually increasing it.  There are other ways to build credit but a credit card is the easiest.  Check out applyfastbankcards, they pay you to apply online.  Good luck:)

Answer 6

There are a few ways to build credit as a student, but none with the leverage that credit cards can offer. The flip side of course is that if you don't have control of yourself, and you get a little spend happy, then you can get into debt. The best rule of thumb is to not spend more than you can pay off at the end of the month.

Many students get a card with the plan to intentionally create a payment pattern. The earlier you can show responsibility, then the stronger your reputation will be when it comes down to buying a house, for example. Each month put your phone and some movie tickets or something on the card, and you know you can pay the balance at the end of the month, and there is your pattern.

Facebook was displaying this site - http://www.applyforastudentcreditcard.co... -  and it has some good info, just be sure to read the applications and think about how each card works with your spending habits, needs, lifestyle, etc..

Good luck!