Credit card companies go back to school

Those should have been valuable protections, but, as The Wall Street Journal revealed May 7, they’re not. While abiding by the strict letter of the law, credit card companies are successfully circumventing all three regulations. As law Professor Jim Hawkins of the University of Houston told The Journal, “a ton of loopholes” allow issuers to undermine the spirit of the act.

Yes, card issuers no longer have stalls on campus, tempting students to sign credit card applications with free slices of pizza or T-shirts or Frisbees. The stalls have moved, sometimes just yards off-campus, to paths that students use heavily. Or they remain on campus but market only checking accounts. Then, anyone who signs up for one of those check accounts is likely to start receiving credit card offers from their new bank through the mail. Or they have moved online, using email and social networking sites to reach kids.

And what of those pizza slices and Frisbees? They have been replaced with vouchers and statement credits, neither of which counts as a “tangible item as a gift” within the meaning of the Credit CARD Act.

Credit card applications that don’t need co-signers

None of this would matter too much if every application had to be co-signed by a responsible adult. But that’s not the case either. To begin with, any adult will do, so a fellow student who’s over 21 can sign.

However, it’s unlikely that many bother to find a senior to provide a John Hancock. Why would they? The law says that those under 21 can sign on their own providing they have an independent income, a provision intended to allow youngsters with jobs or trust funds from being disadvantaged. But, as this credit card news blog observed last August (Student credit cards-still hard lessons to be learned), banks seem willing to treat pretty much anything, including allowances from parents and student loans, as independent income.

Yes, that’s right. Kids can count the money they’re borrowing in student loans to borrow more money on credit cards. In fact, when Professor Hawkins polled 300 students last year, 29 percent of respondents said they’d used student loan debt as “income” on their credit card applications.

They needn’t have gone to the trouble because card issuers don’t routinely check income claims on applications. So some student credit cards may be the equivalent of so-called “liar loans”, which caused so much damage to the mortgage market back before the credit crunch.

Student credit cards can be good

So what’s a parent to do? For those with financially responsible offspring, the best plan may be to find good student credit cards before their kids head off to college, and to warn them off taking on any new ones. For example, the Journey Student Rewards from Capital One offers a 25 percent bonus every time the cardholder pays on time. That could be good training in taking responsibility.

Another is the Citi Dividend Platinum Select Card for College Students, which has a good rewards program, a zero-percent introductory APR for those who qualify, and would look great (doesn’t all platinum plastic?) in any student’s wallet.

When the Credit CARD Act of 2009 was signed into law, protections for students and young people were widely seen as among its most important provisions. Personal finance columnist Michelle Singletary, writing in the Washington Post, recently said those who harbored such high hopes were naive.

Sadly, she’s probably right. Who in their right mind would think that something as trifling as a federal law could stand between credit card companies and a profitable target market, especially when the Federal Reserve appears to regard its regulatory role as that of industry lapdog?

Student credit cards for all

Think that’s a bit hyperbolic? Well, one of the key provisions of the act was to ban people under 21 years from being given credit cards without an adult to co-sign. Since that could have been unfair to rich kids, and those who were working and more than capable of maintaining a card, a single exception was allowed: those under 21 who had sufficient independent means to make payments could have cards without a co-signer.

Sounds sensible? It was–right up until the Fed decided to define sufficient independent means so widely as to make it meaningless. Credit card companies could choose to count all income as independent: not just wages, trust fund incomes, dividends and so on, but also scholarships and grants, parental contributions and even student loans.

And, just in case there was a single student out there who still failed to qualify, the Fed decided that card issuers had no obligation to verify any income claims. So if 18-year-old S.Tony Broke said he was making $40,000 a year, there was no requirement to check out his story.

Credit card offers uncontrolled

Ms Singletary’s Washington Post story highlighted other areas in which the Credit CARD Act’s provisions are being poorly enforced. For example, the law tried to prevent credit card companies from offering tangible inducements to students on campus. This was supposed to end promotional activities that traditionally lured first-year students into making credit card applications.

But a study of 300 students by the University of Houston Law Center found that 32 percent of first-year students interviewed recalled seeing credit card companies’ promotions on campus. That’s very close to the numbers in previous years, before the new law came into effect. Seventy-six percent claimed to have received a pre-approved card offer in the previous 12 months.

And, although the Fed agrees that card issuers can’t say that you’ll get a free slice of pizza or T-shirt if you sign up for a card, it sees nothing wrong with them saying you can have exactly the same tangible inducements if you listen to their pitch. And other credit card offers that provide intangibles (discounts, introductory rates, rewards points and so on) are completely unregulated.

Credit card regulation and regulators

Of course, it’s perfectly reasonable to argue that government has no business meddling in private contracts, and that all credit card regulation is wrong. That’s a valid political position. But it’s not one for a regulator to take. When an act of congress is properly signed into law by a president, the regulator’s job is to enforce it as best it can–like it or not. When it comes to student credit cards, the Federal Reserve seems not to have lived up to its duties.

A couple of months ago, this blog reported on ways in which credit card companies are continuing to circumvent the Credit CARD Act of 2009 when pushing plastic to those under 21. That legislation supposedly obliged issuers to give cards to young people only with an adult to co-sign the agreement, unless the youngster could show he or she had sufficient independent income to manage the debt.

But when the Federal Reserve drafted the relevant credit card regulations, it allowed issuers to count student loans, grants and scholarships, and even parental contributions as “independent” income, thus defeating one of the clear objectives of the act. At least one of the major card issuers is already saying that any under-21s who claim to have (no proof required) a total annual income of more than $2,000 may be eligible for one of its cards. Is there a single student nationwide who has a clean credit report and who does not qualify?

Student credit cards still pushed on campus

Monday, the Fed released a report to Congress on deals struck between credit card companies and institutions of higher education and their affiliated alumni organizations and foundations. It turned out that 1,044 of these, worth more than $83 million, existed last year. Very nearly three-quarters of that $83 million was accounted for by one issuer, FIA Card Services, which is a subsidiary of Bank of America.

Today’s Washington Post calls these relationships between colleges and credit card companies “an insidious alliance.” And its magnificent conclusion is worth quoting in full:

Look, if we know – because we’ve studied it to death – that many young adults (and older ones, too) don’t have a grasp of basic money management, we should be outraged that institutions of higher learning have entered into these agreements giving access to financially vulnerable students. After all, there’s plenty of time for our young adults to learn to be debtors.

Credit card co-signing too rare?

Three months ago, the National Endowment for Financial Education (NEFE) had Harris Interactive undertake an online poll of parents with kids aged 18-20 years. And it turns out the 61 percent of respondents said that they would not co-sign a credit card application for their offspring. Another 16 percent said they weren’t sure if they would, leaving, presumably, fewer than one-quarter who definitely would.

NEFE was disappointed by the findings. It had funded recent research at the University of Arizona that suggested that “parents have the greatest influence on building positive financial knowledge, attitudes and behaviors in their children.” And the organization regretted that some parents were missing out on a key “teachable moment.”

Credit cards can be good for kids

One reporter who shared NEFE’s disappointment was Dan Kadlec of CBS MoneyWatch. He pointed out earlier this month that while co-signing a credit card application may put you on the hook for your kid’s financial problems, in reality you already are.

He suggested–as this blog has often done in the past–that if you’re seriously convinced that your child is likely to screw up his or her finances, then you could look either at secured credit cards or prepaid debit cards. But he went on to urge that, as long as you’re not slitting your own throat, you should consider a product with low fees, low limits and low rates that has been especially designed for students.

Two that are worth checking out are Citi Forward® for College Students, and the Discover® Student Card. Both of these offer introductory zero percent APRs for six or seven months to those who qualify, reasonable rates thereafter and credit card rewards programs.

The New York Times ran a piece Thursday that suggested that credit card regulation may be stalled while the new Consumer Financial Protection Bureau is set up. The problem is that the President’s pick to head the new regulator, Professor Elizabeth Warren, is so wildly unpopular among Republicans that he dare not nominate her yet as the bureau’s director.

Instead, he has appointed her a White House assistant, and tasked her only with creating the new organization. Current thinking is that she will be nominated for the top post sometime next year, when her record as an administrator is clearer and her confirmation stands a better chance of passing the Senate.

However, it’s now emerged that the bureau’s limited rule-writing powers are ineffective until such time as a director is in place. And that means that it’s likely to be at least mid-2011 before that work can even start.

Credit card applications and credit scores

The Dallas Morning News provided excellent advice earlier today for those considering making a credit card application. Check your credit score before you apply.

If that score is lower than you think it should be, make sure your credit report is accurate, and–if it’s not–ask the credit bureaus to correct errors. This blog will be covering this process–which is sometimes less than straightforward–in more detail soon.

When you know your credit score, only shop for credit cards that are appropriate. The best credit card offers are often reserved for those with excellent credit reports, so if your FICO score is over 750, you would probably be better off applying for one of these.

If you haven’t quite reached those dizzying heights, but you’re above 720, then you may still qualify for better than average credit card deals. If your score is between 660 and 720, you can probably get a mainstream card. But if it’s below 650, you’re likely to be considered sub-prime. If that’s the case, and you’re turned down for a standard card, why not consider a secured credit card?

Student credit cards face new competition

Meanwhile, The Washington Post reported today that a new form of plastic is arriving–uninvited–on college campuses across the nation. Apparently one million students have received a MasterCard® branded debit card from a company called Higher One.

And many aren’t happy about it. Critics say that the new cards, which allow users to access their student loans in retail and other outlets, aren’t covered by recent credit card regulations and carry high fees.

If you’d prefer to stick with a mainstream student credit card (and have the now theoretically mandatory cosigner), you could check out the Citi Forward® for College Students card, or the Discover® Student Card. Both of these offer zero percent APRs for introductory periods and credit card rewards programs.

Thank heavens for the Credit CARD Act of 2009. Not only did it stop credit card companies from employing all sorts of dubious marketing practices to lure students into signing up for cards they didn’t need, but it also says that those who are under 21 years old can only get a card if an adult co-signs the agreement–unless, that is, the youngster can prove that he or she has enough independent income to make repayments unaided. Parents across America heaved a collective sigh of relief when that law was passed.

But they sighed too soon. This is credit card regulation. And that means, of course, that no loophole goes unexploited. So it’s no surprise that some card issuers’ armies of lawyers have already circumvented the law.

Credit card regulation fails again

When the act was signed, consumer advocates begged the regulator, the Federal Reserve (who else?), to define what constituted an “independent ability to make required minimum payments.” It refused. And they asked it to force companies to verify whether or not students making credit card applications really had the resources they needed to support the card. It turned down that one too.

So at least one big bank says that it will issue credit cards to students under 21 years old if they have an annual income of…$2,000 or more. And it will count parental contributions, grants, and scholarships when it calculates that income. Oh, and it won’t ask for any proof.

Adam Levin, who used to be director of the New Jersey Division of Consumer Affairs, told The Washington Post, Friday, that, before the Credit CARD Act: “If you were a student and you could fog a mirror, you could get a credit card.” It looks like nothing has changed.

Student credit cards–some responsible ways forward

Assuming that you’d prefer your beloved offspring not to be lured into a debt trap, your first step is to avoid telling her or him about this loophole. What, you’ve never covered up an uncomfortable truth for a good reason before?

Then act as if the law is working just fine. If your child is financially responsible, you could offer to co-sign a credit card application for a specialist student product, such as the Citi® Dividend Platinum Select® Visa® Card for College Students or the Discover® Mix Tape Student Card.

However, you risk your own credit score taking a ding if the fruit of your loins defaults. So, if you think there’s a real chance of that happening, you could opt for a secured credit card, such as the Public Savings Bank Secured Card. These require a deposit to be paid up front (think of it as a security deposit on an apartment rental), but have the advantage of allowing youngsters to build up their own credit scores while keeping them well away from yours. Just make sure that the card you choose reports to all three of the big credit bureaus.

Of course, the safest route is to opt for a prepaid card. These don’t report activity to anyone, and shouldn’t allow a student to access any credit at all. But some of them have very high fees, so shop around. A good choice for many is The Mango™ MasterCard® Prepaid Card.

Let’s start with the good news. The Federal Reserve published Friday its latest statistical release about consumer credit. The figures, which relate to June, show that “revolving credit” (nearly all of which is credit card debt) was down again that month, and now stands at $826.5 billion. Out of the last 21 months, according to the Los Angeles Times, this form of debt has fallen 19 times.

Given that the Fed reckons that outstanding revolving credit stood at $958.1 billion in 2008, that means that Americans have paid back about $131.6 billion to credit card companies in two years, right? Wrong. As this column has pointed out previously (and the Philadelphia Inquirer confirmed last month), a large proportion of the reduction is accounted for by “charge offs”, which is what the industry calls debt that it writes off because it’s uncollectible and passes to collection agencies.

In fact, the Inquirer says that, in the first quarter of 2010, about 40 percent of the apparent reductions in credit card balances was actually accounted for by charge offs. And some think that’s a conservative estimate. Still, if you make the assumption (and statisticians are likely to abuse you if you do) that 60 percent of the last two years’ reductions were genuine pay downs, that still means that Americans have paid off their credit cards to the tune of nearly $80 billion.

Credit Reports and Children

At least your young children don’t have to worry about their credit card debt and credit reports, do they? Again, the answer, regrettably, is a qualified Wrong. Because, last week, a number of newspapers covered a story about the growing incidence of people stealing children’s identities, and running up debts in their names.

This grisly trend is apparently enabled by the current social security number (SSN) system. Apparently, criminal gangs now use a combination of public sources and online trawls to identify SSNs that currently have no credit record attached to them. They can then steal that identity in order to borrow money.

Of course, children’s SSNs generally go unused for at least 16 years, which makes them especially vulnerable to this crime, and the Christian Science Monitor says that seven percent or more of all identity theft cases that are reported affect these youngsters.

If you’re tempted to check your kids’ credit reports, the Monitor cautions that you might be making things even worse. In doing so, you could create a credit file in their names, which may make them even more vulnerable to identity thieves.

Credit Scores and College

What if your son or daughter is off to college, and has a credit card application turned down because of identity theft? Well, the first thing is to report it, and the web sites of both the Identity Theft Resource Center and the Federal Trade Commission provide advice about what to do.

However, it’s likely to take some time to resolve the matter, and during that period, you may have to:

• Issue an authorized card in his or her name on one of your own accounts, which may–depending on the child–involve a leap of faith too far, or
• Find one of the better secured credit cards, which requires a deposit, but could count toward building a credit score while the identity theft is being sorted out, or
• Source a good prepaid credit card, though you need to be careful about high fees with these

Among the best of the last two types of product are:

1. Secured credit cards: Public Savings Bank Secured Card
2. Prepaid cards: The Mango™ MasterCard® Prepaid Card

There’s a lot of moralizing that goes on about credit card debt, and people who have been smart enough to avoid it often look down their noses at those who’ve got themselves into deep trouble. So it was refreshing to read Trent Hamm’s “confessional” piece in the Christian Science Monitor last Friday.

Trent, who’s clearly neither bad nor unintelligent, described how he left college with “manageable” credit card debt, but found himself a few years later owing $20,000 on his cards. The monthly repayments on that were costing him more than his rent, and he had reached a point where he simply couldn’t satisfy all his creditors. He’s turned things around now and acknowledges his mistakes, but his explanation for his experience illustrates how human–rather than immoral or stupid–his actions were:

Why did I buy? There was a mix of things going on. Poor impulse control. Career-related anxieties. Lots of stress. All of these things were solvable on their own and buying things I couldn’t afford was merely a short-term salve for them. It was easy to forget that pain if I could go home and read a new book or play a new game for a while.

Credit Card Use Overseas

Yesterday’s Seattle Times explored the difficulties that Americans often face when trying to use their credit cards abroad. Banks in many countries (across western Europe, but also elsewhere) stopped relying on magnetic strips for swiping credit cards many years ago. Instead, their cards contain a microchip, and customers never sign for transactions, instead typing their PIN into a keypad.

This undoubtedly reduces queues at check-outs because it’s a faster process than swiping and signing. It also has some security benefits, partly because it’s supposed to be inherently safer (though not perfectly so), and partly because you never need to lose sight of your card. In a restaurant, for example, your waiter brings a portable terminal to your table and conducts the transaction there.

This is all very well, but what happens to Americans, who don’t have chips in their cards? Well, in theory, outlets should print off a slip and allow you to sign. But some smaller ones don’t. And automatic machines that sell tickets, gas, highway tolls, and so forth simply won’t work. So if you’re travelling overseas (and Canada and Mexico are both introducing “Chip and PIN” at the moment), your credit card use could be affected and you probably should carry more cash than you usually would.

Student Credit Cards

Last week (July 19), the Index Credit Cards news blog mentioned a number of student credit cards that could suit those who will soon be off to college. Today’s Detroit News raised an additional point on the subject that’s worth repeating.

If you’re not convinced that your son or daughter is yet ready for his or her own credit card, then you could always order an additional card for him/her on one of your accounts. Of course, the trouble with this is that your offspring could go off on a spending spree with your credit limit.

However, people with American Express charge cards can set (and later change) individual spending limits on each of their additional cards. Now, try that on your husband/wife/partner, and you may well find that the consequent cost of couples counselling outweighs any savings on your card bills. But use it on your son’s or daughter’s additional card, and you can prevent out-of-control spending, while still being able to up the limit in an emergency.

If you’d like to to have the ability to help manage your child’s student spending, then check out the American Express® Preferred Rewards Gold Card, or other American Express cards that offer this functionality.

You could find the best credit card news you’ve seen in ages.

Last Thursday, the U.S. Senate followed the House’s earlier lead when it passed the new financial reform bill. The law now goes to the President for signature, but some are warning that it could be years before credit card users see much benefit.

Certainly, banks and other card issuers were worried that this new round of credit card regulation could hurt them. A New York Times editorial last Thursday reported figures from the Center for Responsive Politics that estimated that $600 million had been spent by the financial sector in attempts to weaken the bill’s provisions. Of course, the law covers a great deal more than just credit cards, and much of that money would probably have been spent lobbying against other measures.

What’s New?

From the point of view of credit card companies and their customers, the key part of the new law is the creation of a new consumer financial protection bureau. The Times thinks this is a great step forward, saying in that editorial:

The new consumer financial protection bureau established in the bill is a milestone, not only for its intent and power to rectify lending abuses, but because it will institutionalize the insight that the safety and soundness of banks cannot–and should not–be measured by profitability alone, but by the impact that bank practices ultimately may have on consumers.

However, others are less optimistic and some say that the new bureau’s effectiveness could depend on the will of those who run it to take the consumers’ side against the banks. Given that many executives are expected be brought in from existing financial regulators that have less than heroic track records when it comes to this, those with credit cards should, perhaps, not hold their collective breath.

Some Specifics

Supporters of the legislation hope for two principal outcomes:

1. Greater clarity across the board–from the credit card application and agreement through to statements and notices of changes.
2. Agility on the part of the regulator to close abusive loopholes (without the need for new legislation) as soon as credit card issuers begin to exploit them.

Critics say that it could eliminate many of the existing differences between credit card offers, thus closing down much of the competition that currently exists between issuers.

Student Credit Cards

This is the time of year when those who are heading off to college for the first time, and who have yet to apply for credit cards, should begin to research the market. The Credit CARD Act of 2009 has added extra protections for young people (see IndexCredit Cards’ news items), but nobody should think that’s a reason to take less seriously the task of finding the right fit between card and kid.

If you’re a parent with offspring who are in this position, you now have much more control over the choices made than you used to. You need to decide whether you think your son or daughter would be better off with a prepaid card, a debit card, cash, an authorized user card on one of your accounts, or a full-blown card of his or her own.

If you decide on the last of those (and do your research before you reach any conclusion), you may find it worthwhile checking out the following four student credit cards, which have been designed to enhance college life:

• Citi ForwardSM Card for College Students
• Citi® Dividend Platinum Select® Visa® Card for College Students
• Discover® Mix Tape Student Card
• Discover Student Open Road

Yesterday, TransUnion, one of the big-three credit bureaus, unveiled an enhanced form of credit score that could make it more difficult for some Americans to obtain credit cards. According to TransUnion, credit bureaus traditionally calculate credit scores using four main forms of historical data:

1. Past delinquencies
2. History of responsible use
3. Debt level
4. Utilization (the proportion of your credit limits that you actually use)

However, the company is now able to offer–in partnership with ID Analytics–a fifth dimension based on people’s “stability.” And it claims that this additional perspective can, in some circumstances, reduce bad credit decisions by up to 46%.

Credit Card Debt Problems Down Again

Also yesterday, Moody’s Investor Services published its monthly survey of credit card charge-offs, which is industry jargon for the balances that credit card companies write off because they think the debts have become noncollectable. That doesn’t, of course, mean that nobody will try to retrieve the money; anyone whose balance is charged off should expect to hear fairly soon from a collection agency.

The first bit of good news is that Moody’s says that charge-offs on credit cards in May fell for the second month in a row. Jeff Hibbs, an analyst with Moody’s, says that the company believes that “…credit card charge-offs have passed their peak levels of this credit cycle.”

Credit Card News–Things Are Getting Even Better

The second piece of cheerful credit card news to arise from the Moody’s report concerns delinquencies, which are overdue payments on balances that are yet to be written off. In May, these fell to their lowest level since November 2008. Early stage delinquencies (accounts overdue by 30-59 days) were even healthier, and the company says: “The rate is approaching its historically low ranges of 2006-7.”

All of this suggests that fewer Americans are getting into trouble over credit card debt. And that has to be a welcome thought for card holders, credit card companies, and anyone who cares about the health of the U.S. economy as a whole.

Prepaid Credit Card Swipe Fees to Be Unregulated?

Regular readers may recall that legislators on Capitol Hill are currently deciding whether to regulate “swipe” (or “interchange”) fees, which is the cut taken by credit card companies and payment networks every time a merchant swipes a card. A House-Senate conference is currently hammering out the details, but it appears that lobbyists have won a concession over plans to limit swipe fees on prepaid credit cards–as they’re oxymoronically called.

Earlier today, the Washington Post reported that the conference had decided not to regulate these fees, mainly because to do so could harm poor users who often receive state benefits through fee revenue. If swipe fee revenues are reduced, issuers might make up the difference with higher fees for users.

Credit Card Use Without the Credit

As discussed in previous columns, prepaid credit card use can prove expensive because they often have high fees. However, if chosen with care, prepaid cards can provide a convenient payment method for those for whom traditional credit cards are not appropriate.

One such group is teenagers, and Discover offers a useful product that’s tailored for the young, the Current by Discover Teen Prepaid Debit Card. Other groups include those who cannot–or do not wish to–access mainstream cards. People in that position could check out the ACE Visa Prepaid Debit Card or The Mango™ MasterCard® Prepaid Card.

When researchers at the University of California and the London School of Economics teamed up to explore how genes affect some behaviors they came up with a surprise finding. People who have a low-efficiency version of the MAOA gene are significantly more likely to build up troubling levels of credit card debt.

The Spring 2010 edition of LSE Research explains:

The MAOA gene is linked to the neurotransmitters serotonin, dopamine and adrenaline, which, among other things, control mood, heart rate and cognitive ability. How efficient the gene is… influences the chances of someone being impulsive and prone to addiction.

Of course, there’s nothing to stop people overcoming their impulses through sheer willpower, but this remains an interesting insight, and one that may be of particular concern to those parents who have to help their teenage children decide what sorts of plastic (if any) to use when they arrive on campus later this year.

Credit Card Regulation and Students

As yet, there’s no generally available test for the gene, so parents still have to use their common sense to work out whether the apple of their collective eye is one of nature’s hoarders or wastrels. But they should be happy that this year, for the first time, nearly all of them have the power to determine what card their teen will carry. And that’s thanks to federal credit card regulations that came into effect earlier this year.

According to the FDIC, the new rules say that credit card companies:

…will be prohibited from issuing a credit card to a consumer younger than 21 unless he or she submits a written application that includes the signature of a co-signer over 21 or information indicating the young consumer has independent means to repay the card debt.

Before Co-Signing a Credit Card Application

If you’re a parent in this situation, you should think twice before co-signing a credit card application. Of course, if your son or daughter is great with money then the risks are low, and the benefits (in terms of the child building up a credit report early) considerable.

But beware. If your youngster can’t keep up with payments, credit card companies expect you to settle in full, and any delinquencies display on your credit report.

If you have concerns about your kid’s financial self-control, you should consider refusing to co-sign, and instead:

• Insist on a debit card (but don’t opt in for overdraft cover)
  
• Add the child as an authorized user on one of your credit cards (piggybacking)
• Make the teen use a pre-paid card (but shop around, because fees vary hugely)

Student Credit Cards–Some Smart Choices

Discover Bank has a whole wallet-full of different credit cards specifically created for students. It may be worth looking at them, but it’s probably best to start with the Discover® Student Card, which is understandably a favorite. Right now, it’s offering unlimited cash back rewards, an introductory zero percent APR for six months (followed by a sensible, risk-based rate), special cash back bonus schemes, and cool card designs, all for no annual fee.

Meanwhile, the Citi® Dividend Platinum Select® Visa® Card for College Students has similar but slightly different terms. To start with, you get a seven-month zero-percent APR introductory period. The card comes with 5% cash back rewards for 6 months on eligible purchases at convenience stores and supermarkets, gas stations and drugstores, and even for utilities and cable. After the initial 6 months, the reward is 2%, which sounds like a good deal.

Other student credit cards from these banks that are worth exploring include:

• Discover® Student Cards Monogram Collection
• Citi ForwardSM Card for College Students
• Discover® Mix Tape Student Card