The Best Credit Cards for Irresponsible College Students

Written by: John Landers

Research sponsored by the federal agency Sallie Mae with the global market research company Ipsos shows that the percentage of college students who have credit cards in their names have declined from 42 percent in 2010 to 35 percent in 2012. Sixty percent of college seniors owned credit cards compared to 21 percent of freshmen.

Two of the main reasons behind the Credit Card Accountability Responsibility and Disclosure Act (CARD Act), which became effective on February 22, 2010, were to teach college freshmen financial responsibility and to keep students from accumulating too much debt during their college years.

For students under the age of 21, the CARD Act requires them to show proof of income, which demonstrates their ability to repay the debt or have a co-signer on the credit application.

Building good financial stewardship

Studies have shown that when it comes to financial responsibility, the teachings of parents are extremely important for college students to develop positive financial habits. Parents should make sure they have a discussion with their child entering college. Some topics to talk about include:

  • Proper financial management
  • Creating a budget
  • Method of paying for various items—cash, debit card or credit card
  • How to save
  • Tracking finances
  • How they will pay the bill each month

Talk about the positive uses of credit cards, such as how it eliminates the need to carry cash; provide finances in an emergency ; or how it can promote financial responsibility. Emphasize how  establishing a good credit history can benefit them later when they are ready to purchase a home or vehicle.

Irresponsible students

The fact is that not all students will manage financial matters including credit cards responsibly. Irresponsible use of credit can have serious repercussions because it lowers their credit score. The most devastating consequence is the inability to qualify for a loan. Even if they qualify, they will pay much higher interest rates and other costs. It can also lead to higher insurance rates or cause one to miss out on certain employment opportunities.

Depending on how you want to approach helping your student become a responsible credit card user, here are three of  the best credit cards for irresponsible college students:

Discover IT – Whether you believe that a credit card can help a student become more responsible or simply looking for a good card, the Discover IT card makes a wise choice. It is one of the most popular credit cards for students and does not have an annual fee. Cardholders can receive up to 5% cash back, but must keep the card in good standing to take advantage of the rewards program.

Capital One Secured MasterCard – This card has been design for people looking to reestablish themselves and overcome bad credit. Since the Capital One Secured MasterCard is a secured card, it is among the best credit cards for irresponsible college students. The cardholder must pay an annual fee of $29 and a security deposit a security deposit ranging between $49 and $200 for a $200 spending limit.

AmEx Prepaid If you want to avoid credit cards and teach responsibility, the AmEx Prepaid card does not build credit. Parents can use the card as an effective tool for teaching students home to budget and manage their finances because they can only spend what is loaded onto the card and bypass a slew of fees.


The Best Credit Cards for Irresponsible College...

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