What's the best credit card for a college student, preferably with a good signup bonus? TravelSort reader Cheryl writes:
“Our 20 year-old son, who is a junior in college, would like to have his own credit card. He is currently an authorized user on several of our credit card accounts and frequently uses them very responsibly for purchases, dining, fuel, etc.
Which credit card do you recommend for him? I specifically want to know if there is a credit card with a signup bonus that he might qualify for? He works part-time, but has very little yearly income; he has some stocks and bonds that generate some interest and dividends each year.”
My top recommendation for travel rewards cards, with the best sign up bonuses, are on the Best Travel Credit Cards page, but I recommend college students read the following before applying, especially as cards such as the Sapphire Reserve (which I recommend getting as soon as one qualifies, thanks to the great 3X points per dollar on all travel and dining, and $300 travel credit per membership year) are less likely to approve college students with a low annual income.
1. Find Out Your Credit Score
Most of the best signup bonus offers are for applicants with at least a FICO of 710, if not higher. Go to freecreditscore.com to get your free Experian FICO (Chase often pulls from Experian).
2. Opt into Credit Card Offers
To maximize your chances of getting approved for a good credit card offer, be sure to opt in to credit card marketing. For example, for Chase, by call Chase at 888-868-8618. And if you can't remember if you previously opted out, call the OptOut Prescreen number, 888-567-8688. Select option 2 to opt in.
3. Students Should Remain Authorized Users on Parents' Credit Cards When Applying for Their Own Cards
All the major credit card companies such as Chase, AMEX, Citi, and Bank of America report authorized user activity to all three credit bureaus, Experian, Equifax and Transunion, so assuming parents have a strong credit score, it can help their student build his/her own credit score by having him/her as an authorized user.
But parents should be sure to keep their student as an authorized user when s/he starts applying for his/her own credit card. Removing a student as an authorized user can dent the student's credit score, so delay this until the student has the key credit cards s/he wants, and a reliable source of income to report for new credit applications.
4. Keep Credit Utilization Low
As we mentioned in our post Understand How Your Credit Score Works, 30% of how a FICO credit score is calculated is Credit Utilization, or how much of your existing credit line you're utilizing. So if you have a $5000 credit line, don't spend $2500 of it, which would be 50% utilization and is high. Instead, aim to keep your credit utilization to about 10-15% of your total credit line, and if you do have a large purchase, pay it off immediately instead of waiting for your statement to close.
5. Get (or Product Change to) a No Annual Fee Card That You Keep Forever
15% of your credit score is determined by your credit history, so especially when you're starting out, in addition to always paying in full and on time, it's important to have 1-2 cards that you keep forever. I particularly like the Chase Freedom, with its rotating 5X categories, so if you're able to be approved for the Chase Sapphire Preferred but end up not keeping it in a 2nd or subsequent year, don't close it. Instead, product change it to a Chase Freedom with no annual fee. Just remember, particularly if you'll be studying abroad or if you regularly travel abroad, to also keep at least one credit card with a Chip and no foreign transaction fees.
Which Cards to Get as a Student
1. 50K Chase Sapphire Preferred or 50K Chase Sapphire Reserve if you qualify. Flyertalker NWARJ, a college student, was able to get approved for a Chase Sapphire Preferred. Be sure to have a high credit score, 730 or more, if applying for these.
2. 15K Chase Freedom. Rotating 5X categories this year have included grocery stores, drug stores, gas stations, local commuter transportation, and next quarter, restaurants and movie theaters–many of them areas that college students spend on. The card can be used on its own as a cash back card, or paired with the Chase Sapphire Preferred or other Ultimate Rewards linked card to transfer to travel partners such as United, Singapore, Korean, Air France/KLM, Hyatt, etc.
3. An airline card, such as the 60K Citi AAdvantage card if your student regularly flies a certain airline to/from college.
If you're a student under 21 who recently successfully applied for credit cards, which card(s) did you get and why?
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