Student Credit Card and Credit Education Blog

We all know that credit cards help you build your credit history. However, some people think that in order to build your credit score you have to carry a balance on your card at the end of the month. This is not true. You will build your credit history whether you pay your credit card off every month or carry a balance.  In fact, it is actually healthier to pay off the balance on time every month. When you carry a balance you have to pay interest. The more money you carry over, the more interest you end up paying in the long run.

If you do end up carrying a balance from month to month make sure it is a small one. It is also important to keep a low usage ratio.  If you credit limit is $5,000 and you carry a balance of $2,500 that is a 50% usage ratio which is not good. You should keep your credit card usage ratio as low as possible.

The holiday season is now officially upon us. Before long you’ll be shuffling off to family events and eating far more than your belly can handle. Of course getting presents for loved ones and friends is also part of that holiday tradition, and it can cost you a pretty penny at that. However, there is a clever way to score some of those gifts, cash in your reward points. You can totally hook up your family and friends with some swag just by using your card. Let’s map out your master plan to making this years holiday season the most cost effective one yet.

1. Take advantage of those 6 month 0% APR offers that credit card companies like Citi are offering
2. Earn points toward merchandise by purchasing gifts with your card
3. Maximize the ways you earn points

That’s it. It’s as simple as 1-2-3. You can spoil your friends and family without any heavy lifting. All you need to do is put the gifts you were already planning on buying on your credit card, pay the bill at the end of the month (0% interest remember), any then sit back and reap the reward benefits. The best card by far for scooping up mad points is Citi’s Forward card for students.

The Citi Forward card offers its new members a 0% APR on purchases and balance transfers for six months, if you qualify, and gives you ample opportunities to score some sweet points.

You earn one point for every dollar spent and five points for every dollar you spend on books, movies, music, and restaurants. In addition the Citi Forward card rewards you 5,000 points when you sign up for paperless statements within three months of opening your account and hands you another 6,000 points after $250 in purchases are made within the first three months. You also earn 100 points at the end of every billing cycle for simply making your minimum payment on time and staying under your credit line. So basically, you are handed 11,000 points right out of the gate. How sweet is that?

Below is a sampling of reward gifts you may qualify for along with their current point value.

So save yourself money this holiday season with Citi’s Forward card. Reward your family. Reward your friends. Reward yourself.

Best Rewards Card for College Students: Citi Forward card

ScholarshipPoints code: GIFTSRULE

As Little Miss Platinum I enjoy taking my plastic to the mall just as much as all of you do.  All of us twenty-something girls probably first discovered our love for the mall and shopping while playing Mall Madness at slumber parties. The goal of this game was to be the first player to buy six items on your shopping list and get back to the parking lot. Each player received their own credit card which made purchasing items a piece of cake.

However, that was just a game and in real life we usually have to think twice before swiping a credit card.  Credit cards are great when they are used responsibly, but as Mall Madness taught us as kids, the plastic has to be backed up with cash. This is the time of year when we tend to start shopping a lot. Between Christmas presents and new outfits for holiday parties having a credit card can lead to a lot of damage. Damage can lead to having to improve your credit score.

Over the years I have learned this the hard way. I have made purchases with credit that I could not back up with cash. However, I now consider myself to be a responsible shopper.  Little Miss Platinum’s shopping advice is this:

1: Never spend more that what you already have in the bank.

2: Do not be fooled by this evil four letter word: SALE. If something is on sale it is not automatically a justified purchase.

3: Before you make a purchase think about whether or not the item is a need or a want.

4: If you are unsure about an item do not be afraid to think about it for a few days because, unlike the game, making a purchase is not a race.

ScholarshipPoints Bonus Code: MALLMADNESS

Many students become frustrated when they learn a cosigner is required when completing an application for a private student loan. Some because they’ve been on their own for a while now and don’t feel the need for a “babysitter” while others feel trapped because their co-signer options are severely limited. So why do lenders require a co-signer anyway? It’s simple, they want that warm and fuzzy feeling.

I guess the best comparison I can make is if your brother or sister ask to borrow a $100 bucks from you. That can be a risky proposition, right?  Now say Mom or Dad tell you they will guarantee that you’ll get your money back over a certain period of time, say 2 weeks with an additional $10 bucks in interest for fronting the money.  Wouldn’t that make you feel more secure?  Wouldn’t you lend those dollars with more confidence?  A bank works the same way.  A co-signer is the banks safeguard to ensure repayment, but a co-signer can also be your best friend too.

Co-signers often reduce the cost of borrowing.  An individual with strong credit history can help you receive better pricing.  Obviously the lower the interest rate that gets extended to you the better off you’ll be.  You’ll just want to make sure that both you and your co-signer do a credit check before you apply.  It always makes sense to review and fix your credit prior to applying for a private student loan to ensure you get the best rate available.

Review and Improve Your Credit Score

APPLY for a Private Student Loan

Credit card debt is at an all time high with millions of Americans drowning in that deep sea of plastic. Wouldn’t it be nice if you could just mold your credit cards into a frisbee and toss your troubles away?  That sounds like heaven to me.  Unfortunately, however,  life is not that easy.  Our actions hold consequences, but there are options for those out there who are struggling to stay above water with their credit card payments.  Let’s outline a game plan to help get you out of that plastic sea and back on shore.

For those with solid credit: If you have good credit but are burdened with huge monthly payments than you may want to apply for a Discover More Card.  You can transfer over your balance from cards with high interest rates. There is a 0% APR for up to 12 months on balance transfers, then a low 11% APR thereafter.

When getting a new credit card is not an option: If transferring the balance on some or all of your credit cards is not a possibility because of your credit, but you have a lot of credit card debt, you should apply for credit card consolidation.  In some cases you can stretch out your payments for 72 months making your monthly payment more manageable.

Consolidating more than just credit cards: If you have other unsecured debt besides credit cards, (car loans, home loan, etc), and want to consolidate all of it, you should use a debt consultation service. This is for individuals who have a minimum of $10,000 of debt.

ScholarshipPoints code: DSOLUTION

The fact you understand the value of owning and using a credit card responsibly puts you light years ahead of most students your age. You see the big picture at a time when most are just focused on the here and now. After all, knowledge as they say is power and knowing what it takes to build good credit, recognizing the difference between APR and APY, and being familiar with the term “two cycle average” puts you on a completely different stratosphere than most.

Still, it’s good to review these three important aspects of credit while educating those who are new to the world of personal finance. As you are aware the sooner you realize that you are the one who holds the key to that new car and big dream house the sooner you can get started building a credit foundation worthy of turning those dreams into reality.

1. How to build good credit

Knowing what makes up your credit rating is very important. There are five key markers that go into your FICO score calculation with a credit card serving as a key ingredient in four out of the five key categories.

• 35% Payment history
• 30% Outstanding debt
• 15% Length of your credit history
• 10% Recent inquires on your credit report
• 10% Types of credit in use

2. The difference between APR and APY

APR is your annual percentage rate while APY is your annual percentage yield. APR is the measure used to calculate how much interest will be accrued on your principle balance annually without taking compound interest into account. APY on the other hand is the same interest rate measure, however, it also accounts for the compound interest making it a better indicator of how much you will actually pay in interest.

3. Two-Cycle Average Daily Balance

This is the credit card industries dirty little secret. How the two-cycle daily balance works is simple: instead of computing your average daily balance for the current billing cycle, it computes the average daily balance for the current and previous billing cycle. You want to find a credit card company like Citi that does not take advantage of students by putting in place a two-cycle average daily balance billing cycle. What this two-cycle system means for you is that you pay more money in interest each month.

Let’s take an example. Say you have a starting balance of $1,000 on a credit card with a 15% APR. If you do nothing all month your finance charge will be computed as such:

(APR * days in billing cycle * ADB) / days in year = interest

(.15 * 30 * 1000) / 365 = $12.74 interest

So far, so good. But let’s say that you had a starting balance of $1,500 the previous month, and a starting balance of $1,000 this month. Your two-cycle average daily balance would be $1,250. If your credit card uses two cycle average daily balance, you will now pay:

(APR * days in billing cycle * TCADB) / days in year = interest

(.15 * 30 * 1250) / 365 = $15.41 interest

Establishing positive credit is obvioulsy important but getting the best card to use as your conduit is equally important. That’s why the Citi mtvU Platinum card and Citi Forward card continue to top our list of best cards for students. From rewarding students for having a good GPA to lowering your APR when you make a purchase, stay under your credit line and pay on time 3 billing periods in a row they are in a class of their own. It’s fun to dream big, but it’s even more fun to live that dream.

The best college cards for students: Citi mtvU & Citi Forward card

There are two things I want you to do next time you speak with your credit card company.

1) Ask them if they apply your payments to the lowest interest portion of your balance first, and

2) Ask them if they raise your interest rate on outstanding balances.

Under the Credit Card Accountability, Responsibility, and Disclosure Act passed in May banks are no longer able to get away with this.   The Act is supposed to be officially in place by February but consumer complaints may expedite the full enforcement of the Act by December 1.

If you are like me you probably graduated from college with two things; a diploma and a pile of debt. It is completely normal for students to have federal student loans and private student loans to pay off after college, but on top of credit card payments, rent and insurance payments these loans can be a huge burden. There are ways to quickly pay down your debt without getting overwhelmed. Here is the method that I use:

1: Figure out your monthly income and expenses including any student loan and credit card bills. This will allow you to see how much money you have left over after the bare minimum is paid.

2: Pay at least the minimum payment on all of your debts each month. Missing any payment can negatively affect your credit score. A poor credit score will makes it hard to rent an apartment, buy a car and take out any kind of loan in the future. Additionally, if you put off making payments you will end up getting slammed with interest in the long run.

3: Without neglecting any other living expenses and a modest savings plan, use any extra money to pay off whichever debt has the highest interest rate. If you have a lot of credit card debt it is probably best to pay that down first. Once your credit card debt is paid off, try not to accumulate any additional debt. Once your first debt is paid you can move on to using your extra money to pay off whichever student loan has the highest interest rate and so on until you are debt free.

ScholarshipPoints Bonus Code: PAYDOWNDEBT

Let me just start off by saying I was a few fries short of a happy meal back in my college days. I stayed up way too late and drank entirely too much. Needless to say clarity of thought was not my ally during those hazy days. That said, I’m sure you’re wondering how on earth someone could wind up paying more than a hundred bucks for a pack of gum. Well, lets follow the bouncing ball on its enchanted path to overdraft charges.

That particular Friday started off innocent enough as I recall. I woke up at noon, took a quick shower, grabbed a bite, and began my day. I then decided to skip my two o’clock Statistics class. I know I shouldn’t have skipped class but probability theory and standard deviations just weren’t doing it for me. In hind sight getting my butt to class would have saved me a lot of money. Anyway, after I made the executive decision to skip class I headed to the gas station. I realized on my way that I didn’t have any cash on me, but that wasn’t a big deal because I had my debit card. I knew my checking account balance was fairly low however. I was thinking my balance was around $20 bucks. This was my first mistake. All I had to do was call and confirm my actual balance, but I was too lazy.

I then proceeded to pumped $15 of gas, which was fine, but it was the next purchase that set in motion a rash of overdraft charges that had never before been seen. I strolled into the convenient store after pumping my gas and paid for a pack of gum. That $1.50 pack of gum, believe it or not, set me over the brink. I would later discover I was hit with a $39.00 overdraft fee, yikes! As it turns out I only had $16 bucks left in my account that day. The gas charge was fine but the gum purchase pushed me past my available balance threshold. Still, I was none-the-wiser at the time as I continued on my merry way.

After the gas station I swung into the liquor store and picked up some beer for the night. This was strike two. I already knew I was dangerously close to my remaining balance but made the purchase anyway figuring I could just transfer the funds over to my account when I got home that afternoon and avoid any fees.

Here is where a little bad luck and incompetence come into play. When I got home I did transferred the funds over just as I promised myself, but transferred them the WRONG way! I wanted to transfer money from my ING account to my Citi account, which was connected to my debit card, but instead accidentally clicked transfer funds from my Citi account to my ING. Strike three! That was $117 in overdraft charges ($39 x 3) that hit me within an hour!

What I should have done

• I should have called to get my balance
• I should have spoke to a customer service representative to at least dispute my accidental transfer request and get $39 waved
• I should have had an overdraft protection plan. Had I been using my ING debit card instead of my Citi I would have saved myself a lot of money. ING doesn’t charge you a flat overdraft fee, provided you fall within your qualified protection line. Here is how it works: If I was extended a $100 protection line, which I was, and made some purchases totaling $26, while only having $16 in my account the $10 bucks would be pulled from my protection line. Then I would have only paid interest (based on the ING Prime rate) on that $10 until my next deposit was made. Pretty sweet deal.

Open a FREE ING Checking Account Now!

To this day I haven’t bought another pack of Doublemint gum.  It hurts too much.

ScholarshipPoints Code: GUMYUMGUM

Poor and college students go together like rhythm and blues.  As soon as one bill gets paid “poof” another one surfaces. It’s really tough when you’re living for today with minimal means while planning for tomorrow, which is what college is all about. Toss in your occasional $25 overdraft charge and it feels like you’ll never be able to climb out of that financial ditch.

It’s embarrassing to admit but when I was in college I used to gather loose change from underneath the seat cushions of the couch in the common area. There was nothing like the taste of a Pepsi I didn’t have to pay for, and sadly couldn’t pay for. But it doesn’t have to be that way for you. There are ways to bridge the gap between now and your winter break when most students grab some seasonal work. A credit card by Citi can serve as your best friend over the short term.

The real key to credit card discipline is identifying needs and wants and only using it for the needs. Unfortunately that line sometimes gets blurred by many young adults which leads to a sizable credit card balance. Charging a $299 PS3 system on your credit card is clearly a want and not a sensible purchase while using your card for such essentials as gas and food is a reasonable need. Still, if you don’t trust yourself completely you may want to request a lower line of credit or set a credit limit alert for yourself, which Citi offers to all its cardholders.

The credit limit alert system is great because it sends you an immediate email notification if you are getting close to your credit limit. It really is a terrific way of monitoring yourself. With a modest line of credit and a credit line alert you will ensure you’re in control of your spending.

College is stressful enough without wondering if you can make it from here to there because your tank is buried on “E” or stressing out over how much money is left on your credit line. Just think of Citi as the perfect last line of defense. Oh yeah, and as an added perk you can earn points as you spend to use toward gift cards, concert tickets, video games, airline tickets, mp3 players, DVD’s and much more. Qualified applicants can even score a 0% APR on purchases and balance transfer balances for the first 6 months.

So if the seat cushions at your school come up bare now you know you have another option.

The best college cards for students: Citi mtvU & Citi Forward card

ScholarshipPoints code: FINLNEEDS