Are you a college student looking for your first credit card? Among the major credit card issuers in the U.S., only Capital One, Citi, and Discover offer student credit cards. Which company offers the most for students: the Capital One Journey Student Rewards, the Citi Forward, or the Discover It for Students? The contenders are summarized in the table below.
Sign Up Bonus None 1,000 ThankYou Points when you sign up for paperless statements within the first 3 months of account opening. None
Ongoing Rewards 1.25% cash back
- 5 ThankYou Points per dollar spent on restaurants (including fast food), books, movies, and music
- 1 ThankYou Point per dollar spent elsewhere
- 5% cash back in categories that rotate each quarter (with free enrollment)
- 1% on all other purchases
Annual Fee $0 $0 $0
Foreign Exchange Fee $0 3% $0
Other Notables Visa Platinum benefits
- 100 bonus ThankYou Points each billing period that you pay on time and stay under your credit limit
- Up to 2% Purchase APR reduction when you make a purchase, stay under your credit limit and pay on time 3 billing periods in a row (0.25% each quarter, 8X maximum)
- Complimentary Cell Phone protection if you pay your monthly cell phone bill with your Citi Forward card
- Paying late won’t raise APR.
- No late fee on your first late payment.
- No overlimit fee
The Citi Forward offers an excellent option for students. This card gives points on purchases that students would make the most, and it rewards financial good behavior by reducing the purchase APR by up to 2 percentage points for making your payments on time and staying below your credit limit. While 2 percentage points may not sound like a lot, in the long wrong it can really make a difference. The Citi Forward will also will give you an additional 100 ThankYou Points each month that you’ve stayed under your limit and paid your bill on time. One last nice bit of information regarding this card is that the points earned can then be redeemed for (amongst many other things) payments towards student loans by most banks. One small caveat: you’re best off not redeeming the points for cash. If you do, the points then lose value. If you redeem the points for gift cards and student loan repayments for example, they retain their full value (i.e. 1 point equals 1 percent, and 5 points equals 5%).
The Capital One Journey Card also rewards students for good financial behavior. You get a steady 1% cash back on all purchases, and then for each month that you pay your bill on time, you get an additional 25% bonus on the cash back you’ve earned giving a total potential 1.25% cash back. But this is the highest cash back rate this card can potentially earn. Compared with the Citi Forward, this is a relatively low return on your spending.
The Discover It for Students is a relatively new credit card from Discover. It has some really interesting features that a lot of students might appreciate, for example not raising the APR for late payments, or no late fee for the first late payment. But whereas this card lets slide some of the mistakes that are detrimental to good credit, the Citi Forward actually rewards good financial behavior, which is ideally what you’re trying to teach with a credit card aimed at students. That can pay off heavily over the course of time.
There were some other credit cards aimed towards students that came up in the searches, but they were always lacking in some way; for example the cash back rate wasn’t much to speak of, or if it had a decent cash back rate the cap on spending in the bonus categories was low enough that a card holder wouldn’t be able to earn much.
By offering both a rewards program with potential for relatively high returns in categories that are conducive to students and a way to have your APR reduced through good financial behavior, in addition to some other really nice features, Citi really did a stellar job in constructing a credit card that just about any student can benefit from.
Category: Credit & Loans