Posts Tagged student cards

The start of the coming school year will likely see a different scene in campus quadrangles than it was in the past.  With the new credit card law that prohibits offering accounts to students under 21 (with a few concessions), it’s highly possible that we’ll see a drastic reduction in the number of booths offering a selection of giveaways (like shirts, iPods and restaurant coupons) to applicants.

Protecting Students

It’s easy to understand why the new laws have been set.  Over the last five years, the amount of debt students have been carrying across numerous credit cards (an average undergraduate has four) have seen an alarming rise.  Instead of finishing school with their financial life ahead of them, they find themselves mired neck deep in high-interest credit card debt.

Exceptions To The Rule

Under the law, young adults under 21 can still get a credit card, provided they are able to show proof of capacity to pay (e.g. having a job) or have a legal guardian willing to co-sign the account.  Otherwise, credit card companies may not issue them any plastic the same way convenience stores aren’t allowed to sell them alcohol.

Effects

With most student credit cards aggressively marketed to freshmen, a change in marketing tactics is obviously necessary.  However, it is highly doubtful that the rule will be enough to deter credit card companies from trying to get new sign-ups.  While the current schoolyear might see a tad less marketing activity on the part of the issuers, it’s not likely to last for long.  For the most part, expect them to regroup, lay out a new marketing plan and come back strong with a different approach in the coming years.

If you are a student or an alumni of the University of Florida, you should qualify for a University of Florida Visa credit card.  The card itself is issued by Chase and comes with their Flexible Rewards Program.  There’s not much special about this card, although it may appeal to present students due to the better chances of getting approved for one (and the generally lower APR).

This card offers one of the better interest rates for student credit cards, at either prime rate plus 5.99% or 9.99%.  It comes with no annual fee and an introductory 0% APR for the first six months, applicable to both balance transfers and regular purchases.

Rewards points earned in the Flexible Rewards Program do not expire for up to 5 years, although there is a cap of 60,000 points you can accumulate for every calendar year.  There are number of ways to redeem your rewards under the program, including:

Travel Items. To live up to the “flexible” name, the rewards can be redeemed for travel items in a variety of ways, including round trip domestic tickets and conversion into miles with three set airlines (Continental Airlines, United Airlines and British Airways).

Gift Cards. Make sure to wait until you get to 5,000 points, though, as the lower point exchanges for gift card are just plain bad deals.

Gift Items. Chase has a decent selection of items available.

Cash Rewards. The conversion rate of points to cash rebates is pretty bad, so avoid it if you can.  A more interesting exchange might be to use points as a payment for other loans you have with the bank (you’ll need to consult with Chase for exact terms).