NerdWallet’s Best College Student Credit Cards, Spring 2012 Edition

Some are inclined to believe students + credit cards = disaster, but for the cautious, mindful student, credit cards are an invaluable credit-building tool that can go a long way to fund those essential college purchases (Redbull and Starbucks Doubleshots). Student cards can be sorted into two general categories: low interest and rewards. Low interest credit cards are tailored for carrying a balance month-to-month (not what you want to do if you can help it) and aim to minimize interest. Rewards credit cards issue perks for good spending habits.

An easy way to acquire a low interest rate—especially if your income is less than steady—is to co-sign a card with your parents. By “piggybacking” on your parents’ credit histories, higher credit limits and lower APRs will be more attainable. (If you don’t have an income to speak of, the Credit CARD Act of 2009 actually requires you have a co-signer.)

But if you do make a little money and are searching for a student-friendly credit card, take a gander at your options. We suggest giving preference to cards that reward student-specific spending like eating out or buying textbooks. Here are NerdWallet’s top picks for the best student credit cards.

Best overall college credit card

The premier college card is the student Citi Forward. It offers rewards for common college purchases and encourages responsible spending habits. There is no pesky annual fee, and the intro APR stands at 0% for the first 7 months. Every dollar spent on dining out (fast food or real food—doesn’t matter), music, movies and books earns 5 ThankYou points. And check this out: purchases from Amazon.com and college bookstores are considered “books” no matter what they actually are, meaning 5 points to the dollar on the entire inventory. All other purchases are eligible for 1 point per dollar.

The Citi Forward also offers incentives for smart spending. By simply making payments and staying under your credit limit, you can lower your interest rate. Just follow the rules, and they’ll drop your purchase APR .25% every 3 months (with a 2% maximum). You’ll also get 1,200 points for every year you comply. ThankYou Points are capped at 75,000 annually, but redeeming is easy and convenient. You need only accumulate 1,000 points before you start claiming rewards.

Best rewards student credit card

One of the more popular student rewards options, the Discover Student More card has no annual fee and no purchase APR for 9 months. If you need, you can pay off your big purchases over time while avoiding interest. Similar to the Citi Forward, the Discover More yields 5% cash back in defined categories. But with the More, these categories change 4 times a year and include areas like department stores, entertainment, travel and restaurants. Purchases that fall outside the bonus categories can earn 1%.

The biggest drawback of the Discover More is its rewards caps. For example, in Q1 of 2012, it awarded 5% cash back on entertainment and gas purchases. But it limited 5% earnings to $1,500 in purchases – or $75 in rewards. Also, the 1% cash back base rate only activates after you’ve spent $3,000 that year. Until you reach the $3k marker, you only get 0.25%. But, all in all, it’s a solid card for students testing the waters of plastic payment.

Best low interest student card

Want a low interest rate? The Citi Platinum Select for College Students offers one of the lowest APRs out there. The 0% intro APR lasts 7 months and, after that, the APR varies from 11.99% to 19.99% based on your credit worthiness. It does not require a co-signer and does not charge an annual fee. Although it doesn’t offer rewards, you’ll still qualify for the Citi Extra Cash program. Unfortunately, it doesn’t dispense cash back as the name suggests. Instead, you’re paid with access to online discounts. But if you carry a balance and qualify for the lowest available APR, you’ll likely save more on interest than you would ever earn in rewards, anyway.

Best card for studying abroad: Capital One MTV Visa

The MTV Visa card is kind of like your excitable roommate who always wants to party, even if your big final is, um, tomorrow. It earns 5% rewards on what are called “entertainment purchases.” These include everything from concert tickets and movie rentals to campground fees and boat rentals. You also get 2 points per dollar at restaurants and 1 per dollar everywhere else. With no textbook-friendly rewards to offer motivation, you’ll have to somehow muster enough willpower to study on your own.

That said, if you plan to travel or pack the semester with adventure and excitement, this card will serve you well. In addition to having no annual fee, the MTV Visa has no foreign transaction fee, making it ideal for studying abroad. And you can redeem your points for travel purchases on your own or through the Capital One Travel Center.

What to look for in a credit card

Rewards: Most rewards credit cards grant about 1% back on all purchases, though some may give extra in bonus categories or at preferred retailers. It’s smart to choose a card with bonus categories that reflect your personal spending habits.

0% introductory APR: If you’ve already racked up some credit card debt, it’s helpful to find a card with a 0% balance transfer APR that will allow you to pay off your existing debt interest-free. Alternatively, if you anticipate making a big purchase, look for a 0% purchase interest promotion that will let you make gradual payments without accruing interest.

Ongoing APR: If you carry a balance month-to-month rather than paying in full, seek out low interest. With regular credit cards, you generally see a tradeoff between low interest rates and rewards, but the Discover More and the Citi Forward both have 0% APR promotional periods in addition to rewards programs. You may also be eligible to join a credit union. These not-for-profit institutions tend to offer lower interest rates and are more likely to lend to students, thin-file applicants and those with no or low credit.