Picking the Perfect Student Credit Card

by : Nick Makaryk

Before you earn your first college credit, one thing is certain you will be deluged with offers from credit card companies. When you're going away to school, these cards can be real lifesavers for covering day to day expenses, along with covering travel home on breaks.

Credit cards can also pay for redoing that boring old dorm room. Getting the credit card that fits your needs all begins with filling out an application.

Banks and credit card companies will be falling all over each other in an effort to get your business as you walk around your campus. Some will offer you freebies like food and clothing if you just sign right here.

You should never choose a credit card based on these kinds of giveaways. There is no college student who doesn't love a freebie, but this is a big decision which can deeply affect you. You need to base your decision on thought, not free pizza.

Don't be in a hurry to fill out that first credit card application someone gives you. Get three or more applications and carefully compare what they each have to offer or shop online to see which has the best deal for you.

These companies all want to give you credit, maybe even the same credit limit is offered by each company. So how do you decide? First of all, you need to find out how much that this card will cost you (or perhaps, your parents).

One of the costs of a credit card is the annual fee, the other is the interest rate (or APR). If you can find a card with no annual fee, this is the best option. Why pay an annual fee if you don't have to do so? Shopping around will find a no fee card for you.

Generally speaking, interest rates will be somewhere between 12% and 18% on your outstanding balance. Other than interest rate, there are other factors which may make a particular company more or less attractive to you.

You might find that you can get an affinity card; this is a credit card which features your college or university's logo. There are other groups for whom affinity cards are available as well, including political and environmental groups.

Some credit cards will give you points which can be redeemed for rewards including travel and other gifts. These points are earned by paying your minimum monthly payments on time and keeping your spending under your credit limit.

If you do a lot of shopping at stores which offer points too, than you will be getting a lot more for your money if you use these kinds of credit cards. Some cards offer cash back (terms may apply, not all purchases will be eligible for this)

While it's perfectly alright to sit back and listen to the sales pitches from the campus credit card representatives (while eating their snacks), remember that these reps often do not have the information you need to make a wise decision about credit cards.