While I hate debt, I like credit cards. While I’m still waiting on Citi to review my own application, I’ve put together some tips on how to pick out your very first credit card.
1 – No Annual Fee
Some cards charge you just for the privilege of having it in your wallet. This is unnecessary. Any good student credit card won’t have an annual fee.
2 – Rewards
A credit card issued to someone with a limited credit history isn’t going to have a great rewards program. But that doesn’t mean students lose out on all of the action. Check out Citi’s mtvUTM Platinum Select® Visa card to earn points for maintaining a certain GPA and purchasing books. Cash back, though, is usually better, simply because it’s cash.
3 – Widely Accepted
Your card is useless if the store won’t accept it. For your first card, stick with Visa or MasterCard if possible. Discover and American Express are still accepted most places, but you could be out of luck when you need gasoline in the middle of nowhere.
4 – Go With a Brand
If you’re nervous about having your own credit card, consider getting a branded one from your favorite gas station and only use it there. Most of these companies offer a discount on their product when you use their card. However, it’s probably not a good idea to get an American Eagle card or Apple card. Those are just going to tempt you to buy Stuff you don’t need. Once you’ve built up your credit rating, you can consider getting another card with better rewards to use for other purchases.
Bonus
You’ll notice that I didn’t say anything about interest rates. That’s because they don’t matter. You aren’t going to go do something stupid and carry a balance now are you? Good. Interest rates for someone with no credit history can easily reach 20%-30%. But guess what? As much as Citi Bank or Bank of America would like to, they can’t calculate interest on a balance of nothing.
