Author: By David Ellis
NEW YORK (CNNMoney.com) — Laptop, iPod, a messenger bag and yes, a credit card – all the staples of modern college life. Nowadays, owning a piece of plastic has become as much as part of the college experience as griping about the dorm food.
In fact, over three-quarters of all college kids have a credit card, according to a recent study published by the student loan firm Nellie Mae.
Credit Card Rates
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But while many college students are tempted to sign up with the first offer that comes their way, parents and students should know their son or daughter is entitled to some pretty sweet deals even if they have not established a credit history.
A fair APR
For starters, students should be able to qualify for a reasonable interest rate, says Curtis Arnold, founder of the online credit card rating outfit CardRatings.com.
While many cards offer introductory rates of zero percent for the first six to 12 months, students without a credit history should try to find a credit card with an annual percentage rate in the mid-teens – around 16 or 17 percent or lower, says Arnold.
“Avoid ones that get over 20 percent,” he says. “Check every avenue you can and compare what is out there.”
While both fixed rate and variable rate cards have their advantages depending on whom you talk to, securing a card with a low interest rate is important since college kids tend to carry a balance on their credit card. And a higher interest rate can only mean more money out of their pocket.
Rewards card for the responsible
For those students that can stay on top of their expenses and exercise restraint when it comes to using the card, they should know there are some reward cards out there that dovetail with student spending habits, says Justin McHenry, research director at card rating firm Indexcreditcards.com.
Some cards, for example, give you points just for purchasing books, buying groceries or filing up your car.
“For anyone that can handle their finances and pay the card off every month, I encourage them to take advantage of reward cards,” says McHenry.
No fees and a grace period
Students should also be aware that there are plenty of cards out there that offer no annual fee and a grace period of at least 20 days, says Arnold, which is important, especially if they fail to mail that monthly payment on time.
Parents and students should also realize there are plenty of issuers out there that are looking to make a buck off the financially naive, including college kids.
Some issuers, for example, will hit the cardholder with a number of hidden fees, or even worse, says Arnold, they will promise a lucrative gift such as a computer, but then require that the card holder maintain a balance on their card, all while paying interest.
That’s why, says Arnold, it’s so critical to read the fine print before signing up with any issuer.
“Some of the offers out there are just really bad apples and basically huge rip-off offers,” he says.
While students can expect to be bombarded by offers on campus, on the Web and in their mailbox, experts weighed in on what some of their favorite credit cards were for college kids.
mtvU Platinum Select Visa Card for College Students – This card was at the top of almost every expert’s list. Joseph Ridout, spokesman for the advocacy group Consumer Action, said one of the most impressive things about this card was not the rewards, but the fact that students received points for paying their bill on time and for getting good grades.
Ohio Savings Bank Student Platinum Plus Visa or MasterCard – Students with a limited or no credit history that apply for this card should be able to secure an annual percentage rate of 13.99%, notes Arnold.
Sovereign Bank Student Credit Card- Available in as either a MasterCard or Visa, this card offers a stunningly low 9.90% fixed interest rate, making it one of the lowest credit card rates out there right now, says McHenry of Indexcreditcards.com.