Ready for credit? Consider one of these student cards

If your reason for going to college is to have a more financially comfortable future, then you should have two goals in mind when you unpack your clothes, electronics and toothbrush (try to remember your books, too) in your dorm room:

1. To graduate with the best degree you can, ideally summa cum laude.
2. To leave with as high a credit score as possible -- or with no credit report at all.

Of course, the first is the more important. But messing up financially at college is likely to make your life tougher than necessary for at least seven years, which is the minimum amount of time most behavior remains on your credit report. It could potentially add thousands to the cost of your borrowing over that period for just about everything, from mortgages to store cards, and from auto loans to credit cards. If things get bad enough, you might even find it hard to get approved for those at all, as well as to rent an apartment or get a good cellphone deal. Worse, some employers check your credit report before hiring or promoting you, so that dream job you worked so hard to qualify for could be beyond your reach.

Training wheels

It's because the potential for disaster is so great that some experts recommend students start out as authorized users on their parents' cards. With instant and real-time online access to accounts, mom and dad can closely monitor activity, and intervene quickly if things look to be going wrong. Moreover, being an authorized user can -- through a process called "piggybacking" -- actually help establish a credit report, and, over time, responsible behavior can build a young person's score.

Of course, this doesn't suit everyone. An offspring who's truly financially incontinent can ruin his or her parents' good credit. And many students, eager to establish their credentials as adults, understandably find the prospect of being "merely" an authorized user demeaning: a bit like having to have training wheels on your bike when you're in your late teens. In reality, of course, plenty of people in their 20s, 30s, 40s and above would dearly love to be able to piggyback in this way. Indeed, it takes real maturity to recognize this as a truly adult way forward.

For some, it's not a choice: Their relationship with their parents might not be good enough, mom and dad's credit might not stand it, or they're simply determined to go it alone. So what plastic should they -- or those who've now proved themselves through being a good authorized user -- choose?

Best student credit cards

Right now, here is a student credit cards that may be worth a closer look, it offers rewards and does not charge an annual fee:

• Discover it® Student Cash Back. This is a fairly forgiving card for that period when you're still acquiring good financial habits. It doesn't charge overlimit fees, and will even give you a free pass on late fees the first time you pay late. Better yet, it won't impose a penalty APR for late payments. It also doesn't charge foreign transaction fees, which makes it valuable if you're studying or traveling abroad. However, Discover cards aren't accepted in all countries, so you need to check the company's acceptance map before setting off. This card offers a flat 1 percent cash back on all purchases, plus 5 percent back on purchases made in bonus shopping categories that change each quarter subject to quarterly enrollment and quarterly spend cap. This card also features a $20 statement credit Good Grades Rewards each school year your GPA is 3.0 or higher for up to the next five years. 

Some student cards may require you to already have good credit, so -- unless you've already done some piggybacking -- you may struggle to get approved. The Discover one may be a bit easier in its requirements.

Credit cards 101

Whatever card you ultimately choose, be sure to read its terms and conditions before you apply. These are serious, legally enforceable contracts, and you need to understand what you're signing up for. It's true there are fewer "gotcha" clauses than there once were, but you might still be surprised by some of your obligations. For example, you're not going to necessarily earn those bonus reward rates unless you register anew each quarter, and even then there are caps on the cash back you can earn either each quarter or each year.

So good luck with that summa cum laude. Just be sure not to flunk credit cards.

Published 04/01/16 (Modified 05/01/18)