Good credit cards for college student? - Page 2

Originally Posted by kikibay92

Yes, I have returned.


And I'm still fierce!



OMG! Piano! MadMan! I miss you guys!

Originally Posted by not_today

I tried opening checking and savings accounts with Ally, which offers great APYs on their savings accounts, free debit cards/checks (when you make a measly initial deposit), and no annual nor ATM fees, and got denied because just like with other banks if you have no credit score, you'll get denied. There's an interesting loophole though and I am just speculating here, but it seems that when you get denied and apply again in a few days, once you are in the system and reapply you get approved. This bank performs soft credit inquiries, so there are no negative consequences in applying a bunch of times, although I'd space the applying in months.

BTW, you can't make cash deposits with this bank since it's an online bank , but you can either buy a money order for cents and deposit it to your account through the mail using prepaid deposit slips or apply for a no-fee eBanking checking account from Bank of America and make cash deposits there. Both of these banks have been bailed out by the US government, but your money is safe with them since your accounts are FDIC insured for $250k.

Originally Posted by Giancoli

Question for you. I have no credit score or credit history yet, however, when I was at Sears they tried to sign me up for their credit rewards card, ran my social security number and my credit, and was denied. I'm assuming it's because I had no credit history. But will this credit check that Sears did affect my credit score at all in the future?

Originally Posted by Moraine

I got rejected for Discover It for students for lack of credit history. Never had anything under my name except for a bank card so there was no history what so ever. Apply at your own risk.

Originally Posted by not_today

Read it all. I had no credit before getting my SSN and just five months afterward I have two credit cards, one secured and one unsecured, and four hard inquiries on my credit report.

Apply online for a secured card through Capital One. Bank of America also has a secured card, but their opening deposit is considerably larger. The minimum deposit at Capital One to open a secured credit line is $49 in addition to an annual fee of $29 which will be posted soon after you activate your credit card. With the $49 deposit, you'll get a credit line of $200, you can make additional deposits to increase this limit. When you close the credit line you'll get your money back.

Fill out the online form, select the student option when it comes to employment and put in annual salary that allows you to pay a balance equal to your line of credit every month in addition to your expenditures like rent, utilities, etc. The decisive factor in getting approved is showing that you make enough money to pay off your debts. Capital One is very lenient towards people with no credit history or those rebuilding credit. If you don't get a approved, apply again right away, and you'll either get approved or your request will be sent to an actual person and you are very likely to get an approval notice on your email account or mail within 15 days. No credit history is looked at more favorably than having a crappy one.

You won't get a credit score until a credit line has been open for six months. Credit scores are based on several factors pertaining to your credit report like the age of your oldest credit line, how much you owe in relation to how much you can spend, derogatory items (missed payments exceeding a certain number of days, bankruptcy, etc,), among other things. Your credit score is just a number representing how much risk there's in lending you money. For big loans like mortgages or car loans, creditors will tend to ignore your score and look at what's in your report in conjunction to how much you make.

How to maintain a healthy credit history:
-Never miss a payment. Pay at least the minimum every month. This factor will have the greatest impact on your score.
- Keep your credit utilization below 30%. If your limit is $250 try not going beyond $75. Banks like it when you owe a lot of money because you pay interest and they might even increase your credit line (Capital One will give you an increase at the sixth-month mark and that's all). Credit bureaus don't like it when you owe a lot because it's translated as risky behavior and you'll lose points on your credit score. If you want to spend more, make additional deposits.
- Mix things up a bit. Get a secured loan using money in a savings account as collateral and pay it off in six months to a year. A secured loan essentially is a credit line backed up by money that you currently have in liquid assets like properties, CDs, savings accounts, etc. Those funds are frozen until you pay off the loan and if you fail to make a monthly payment, you might lose all of it in addition to getting a derogatory mark on your credit history.
- Every time you request a credit card or a loan, the creditor makes an inquiry to the credit bureaus requesting your credit report. This causes you to lose points if the inquiry is hard. Limit hard inquiries to 6 per year. Always assume the inquiries are hard when outside of a financial institution. Most people don't know crap about credit. Soft inquiries don't affect your score. Some apartments make hard inquiries, car dealerships and banks make them too when you want to finance a car, a house, or get a personal or business loan.
- After six months apply for an unsecured credit card. To make sure you are at the six month mark, go to annualcreditreport.com and check your history to make sure that your secured credit card is reported as being six months old. You have to do this, otherwise the bank won't have access to a score, it will decline your request, and you'll get a hard inquiry on your report. Keep your secured credit card up until before Capital One charges you the $29 annual fee, by that point you'll have had the unsecured card for six months. Citi's Forward and Capital One's Journey are excellent unsecured credit cards for students and they don't have annual fees. Citi's card is a bit difficult to get, but it's worth the hard inquiry after about 8 months. Capital One is a conservative lender, so their cards are known not to grow with you; they'll give you one or two credit line increases and then stop.
- Store and gas cards won't improve your score unless they are actual credit cards. Make sure to make the distinction.
- If you don't use your credit cards for a while, banks will close them. Use them at least once every four months. This is important because let's say your overall credit availability between all your cards, 3, for example, is $6,000. Card's A limit is $3,000, card's B is $2,000, and card's C is $1,000. If you owe $1,200 on card A and $500 on card B, meaning 28% of your overall credit utilization ($1,700/$6,000), and card C is closed, your new credit utilization will climb up to 34%, exceeding the recommended credit utilization limit. Keep the utilization below 30% individually (card) and overall (all cards' utilization summed up.)

APR, or annual percentage rate, is important if you are going to keep a revolving balance, for instance in carrying a month-to-month balance on your credit card or having a loan. The APR is essentially what you pay in interest every month. You figure out what you owe in interest by diving your APR by 12 (months) and multiplying your principal (your actual debt) by that figure. E.G. In a given month you have a card with a 24% APR and you owe $150. To figure out how much you'd pay in interest, you'd divide 24% by 12 and then multiply $150 by that amount, $150 * .02 = $3. If you pay $25, $3 will go into paying interest, and $22 into reducing the principal.

If you don't carry monthly balances, the APR isn't important because you are paying off the amount you owe before they can charge you interest. Cards with lots of rewards usually have higher APRs as opposed to cards which offer fewer rewards but have lower APRs.

You can always call your creditor to request an APR reduction, unfortunately, if you are new to credit, doing this won't get you far, particularly with secured and student cards which are in essence only useful to build credit and have high APRs to dissuade customers from owing too much money.

Get in the habit of checking your credit report at least three times a year using the website I mentioned before, particularly if you have a lot of credit cards or you want to apply for a big loan, this way you can prevent problems related to identity theft or work on your score to get a loan with a low APR, respectively. Your score is a determinant in what your APR on a loan will be. The lower the score, the lower the APR.

Nowadays, a lot of employers check your credit history to determine how trustworthy and responsible you are as a person. If you are middle class, your credit report rules your life.

To learn more about credit, you should visit this website.