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College Students and Recent Grads, Strategies to Save

5 Ways to Make Extra Money That Don’t Take Much Time

The editorial content on this page is not provided by any financial institution and has not been reviewed, approved or otherwise endorsed by any of these entities.

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We all want to make a little extra money, whether it’s to pay off debt, go on a vacation, or just have a little bit of a cushion. The problem arises when people have very little time to work on the side due to family responsibilities or other obligations. To combat this issue, I’ve compiled a list of ways to make extra money that don’t involve a lot of time.

1. Do One-Time Gigs

Sometimes it takes a long time to build up a substantial side business. Whether you are a freelance writer, car detailer, or dog walker, you often have to work for a few months to build a client base, which takes significant time and energy.

Instead of doing that, Grayson Bell of the blog DebtRoundUp recommends that you look in the Craigslist Gigs section. When Grayson was paying off $50,000 of credit card debt, he looked at his local Cragslist Gigs section every weekend. He said, “I would help people move, pull weeds in lawns, and remove stumps. These gigs can be almost anything and they don’t require you to invest any money, just look and find something you want to do. It also doesn’t require an ongoing time commitment. It’s not passive, but you can find ways to earn cash when you have free time.”

As always, when using Craigslist, use caution when applying for work and make sure the person offering the work is legitimate and safe to work for. Whether you want to clean houses, do yard work, or paint walls, there are probably many opportunities available in your town on any given weekend.

2. Give Your Opinion

Everyone loves giving his or her opinion, right? Well, it’s much better to actually get paid to give your opinion! Chonce, a writer at Single Moms Income has had extensive experience working as a secret shopper, survey taker, and in focus groups.

Her favorite focus group was when “a few other ladies and I met in a beautiful building in downtown Chicago where we received food and drinks while discussing several different hair care products. I answered questions based on my own personal experience and chimed in whenever necessary. After an hour long discussion, we each received $100 and went on our way.”

You can find these opportunities on Craigslist or on a website like Find Focus Groups. Although they do take time to complete, they are usually enjoyable, pay a high hourly rate, and don’t require any preparation.

3. Play Sick

My husband is in medical school and he often works with standardized patients when practicing for large board exams and also in the exams themselves. He just flew to Atlanta to take an 8 hour-long board exam where he had to work with 7 different patients, who were all actors. If you like to act, you can get paid to do this too.

Katharine Paljug is a freelance writer but she’s also an actor who has worked as a standardized patient before. She says “the companies that staff [the patients] want a diverse group to pull from. Best of all, they don’t require any specialized skills or experience, and they can pay anywhere from $15-$60 per hour! When I worked as a standardized patient, I earned $25 per hour, and every month I got to choose how many days I wanted to work.”

To get standardized patient jobs, follow the steps in this post. Essentially, you can look for jobs on Indeed.com or contact the medical schools near you to inquire about opportunities.

4. Work While You Run Errands

One of the best ways to make money without a lot of time investment is to get paid to do the chores and errands you’re already planning on doing that day!

For example, Gretchen of the blog Retiredby40 (and MagnifyMoney contributor) never pays for an oil change. She says that anyone who owns a Chevy, GMC, or a Buick can do the same. Essentially, she works at as a secret shopper using a company called Bestmark. She takes her car to get the oil changed and gets reimbursed for it and paid to write a review.

She says, “In my area oil change or tire rotation secret shops reimburse up to $45 and pay between $25 – $35. This means that you will have to pay out of pocket for the oil change at the location you’re assigned, but Bestmark will send you a check for the cost of the oil change, up to $45, as long as you complete the shop correctly.”

5. Sell Your Junk

Everyone knows that having a garage sale is a great way to make extra money. However, the time commitment involved in setting up the sale, advertising it, and pricing everything seems exhausting. Don’t worry though; there’s a way you can have a garage sale without much headache. Holly Johnson of ClubThrifty recommends that you piggyback off of your neighbor’s sales. Let them set up the signs and put in the work to advertise, and all you have to worry about is setting out your stuff. She also recommends grouping items that are the same price so that you don’t have to spend time individually pricing them.

Using these ideas, you’ll be well on your way to making some extra cash without the intense time commitment. It takes significant time build a side business in addition to your full time work and other responsibilities but with the tips above, you don’t have to!

Finally, Eliminate Credit Card Debt

If you have credit card debt, you are likely paying a very high interest rate to your credit card company every month. The average interest rate is 13%, and the average household has more than $10,000 of debt. That means the average household is likely spending more than $1,000 of interest every year. Another way to put extra money into your pocket quickly is to reduce the amount of money you give to credit card companies. There are two good strategies to reduce your interest rate. One way is to transfer your debt from a high interest rate credit card to a low interest rate credit card. You can find deals with 0% interest for 15 months, with no fee. The best balance transfer deals are updated here.

Another option is to consolidate your credit cards into a low interest rate personal loan. Interest rates start as low as 4%, and (unlike with balance transfer credit cards) you can shop around for the best interest rate without hurting your credit score. You can find personal loan companies here. You will probably discover that reducing your credit card interest rate gives you the biggest savings.

Cat Alford
Cat Alford |

Cat Alford is a writer at MagnifyMoney. You can email Catherine at cat@magnifymoney.com

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College Students and Recent Grads, Reviews, Student Loan ReFi

LendKey Student Loan Refinance Review

The editorial content on this page is not provided by any financial institution and has not been reviewed, approved or otherwise endorsed by any of these entities.

LendKey Student Loan Refinance Review

Updated July 13, 2017

Could you imagine trying to find the best student loan refinancing rate from community banks and credit unions on your own? How would you do it? Would you call every bank and credit union and ask for help? What a nightmare.

LendKey has relationships with 300+ community banks and credit unions all over the United States. LendKey* can issue loans to residents in any of the 50 states. This keeps you from having to pound the pavement by your lonesome. LendKey’s website will show you the best rate for refinancing your student loans.

Since 2007, LendKey has been a one stop shop for student loan refinancing. It also offers other types of loans. But for the sake of this review we’ll be focusing on how LendKey takes care of graduates looking to improve their debt situation. Fixed APRs range from 3.25% – 7.26%. Variable rates start as low as 2.66%. (All of these rates include the auto-pay discount). LendKey is one of the top four lenders in MagnifyMoney’s survey of where to refinance your student loan.

Who can benefit from using LendKey? Anyone hoping to refinance their student loans should consider LendKey. It is easy to apply:

If you’re on the fence about refinancing, here are some of the benefits to be gained:

Lower Payments

Refinance your way to a more manageable monthly payment.

Lower Rates

Spend less on interest by getting a lower rate than the aggregate of all individual student loans.

Simplified Finances

Making payments on multiple loans to multiple institutions at different times of the month can be quite the hassle. It’s much easier to remember just one payment. Many lenders even let you consolidate both private and federal loans.

Different Repayment Options

Different lenders offer different repayment options. It’s wise to explore all the options to determine what makes the most sense for your particular situation.

Pros of Using LendKey

A Unified Application Process

This is hugely important. With LendKey, you’re not shuffled through tons of screens on different domains – all using different logons and different (confusing!) user interfaces. Within 5 minutes, a person can navigate through LendKey’s application process. This means after 5 minutes, you can see how much you can save by refinancing. You can even choose what loan you want.

Cosigner Release Available

Yes, you can secure a low interest rate and then cut loose your cosigner. Once you prove you are responsible – LendKey no longer needs a cosigner tied to your account. This may help convince a cosigner to work with you initially. They won’t need to be on the hook for long. Once you’ve made 12 full and consecutive on-time payments, your cosigner may be released. LendKey does a credit check and examines your income to see if you are free to go it alone.

No Origination Fee

This is helpful since it means you are free to shop around without feeling committed.

Further Interest Rate Reduction

1% interest rate reduction once 10% of the loan principal is repaid during the full repayment period. This is subject to the floor rate.

0.25% ACH Interest Rate Reduction

Many lenders reduce interest rates by a quarter percent for borrowers who agree to automatic payments.

Federal and Private Loans Can Be Consolidated Together

However, you lose some federal benefits in doing so. Things like free insurance (provided with federal loans if you are killed or severely disabled), public service forgiveness and military service forgiveness as well as income-based repayment plans. Grace periods will likely be omitted when writing the new consolidated loan.

Over 40,000 Borrowers Serviced

As of January 2016, 40,000 people have used LendKey’s services.

Excellent Customer Support

According to cuStudentLoans (which LendKey owns so take this with a grain of salt), 97% of customers are satisfied. Customer support comes out of New York and Ohio. Phone support is available each day from 9AM to 8PM EST.

For what it’s worth, I called into support 5 times at random. The support I received from the sales team was really great. Even the gentleman with only 6 months of experience was quite knowledgeable.

Eligible Schools

This list of eligible schools is 2,200 and growing. Chances are your school is on the list. However, LendKey doesn’t encourage students to submit eligibility requests as other student loan refinancers do.

Return Policy

Yes, you can ‘return’ your loan. LendKey offers a 30 day no-fee return policy to allow you to cancel the loan within 30 days of disbursement without fees or interest. That’s pretty incredible.

Cons

LendKey Doesn’t Give You the Complete Picture

LendKey doesn’t help a lot with stacking institutions against each other. I suppose this is meant to not to play favorites. However, it would be nice to be able to read about each institution within the LendKey interface. I’d still advise opening up another tab to research the banks you are considering.

The Fine Print You May Miss

Since LendKey is a loan matchmaker, there isn’t a lot of fine print on the site. This means a person still needs to review the fine print of each institution before finalizing his or her loan as mentioned before. LendKey does a fantastic job of getting you 90% of the way. But that last 10% of fine print is between you and your lending institution. Read through everything before signing up for a new loan.

I read the Better Business Bureau complaint log for LendKey. There are only 11 complaints in the past 3 years. SoFi (a competitor) has 18 and another competitor, Earnest, has no complaints. These complaints were mostly small misunderstandings between the LendKey support team and the borrowers.

The Application Process

There are four steps to the simple application process. Step 1 is for estimating monthly payments for a private student loan. It’s simple. You identify the amount you’d like to borrow and fill in a radio button indicating your credit is fair, good, or excellent. The last part is where you enter which state you live in. This is because many programs are state specific. Step 1 takes 1 minute.

Step 2 takes 2 minutes. This is the step where you compare the rates and offers available to you. Choose what works best for your unique situation.

Step 3 again only takes 1 minute. This is the actual application. As mentioned earlier in this article, this process is done through the LendKey interface. And don’t worry, information inputted into LendKey is safe (privacy policy).

Step 4 takes 10 minutes. This is the step where a person verifies identity, school, and income (screenshots/pictures work so there’s no hassle with scanning!). You will know if you are approved during this step.

As with any company, there are competitors. Here are two worthy rivals also worth considering:

Alternatives to LendKey

SoFi

SoFi stands out with a job placement programs, free wealth management for borrowers and even a dating app. More importantly, SoFi has low interest rates, with variable rates starting at 2.795% and fixed rates starting at 3.35%.

SoFi

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on SoFi’s secure website

Earnest

If you have a low credit score but have potential to earn a good income, Earnest will treat you well. Earnest looks beyond a simple credit score. The application process examines employment history, future earning potential and overall financial situation.

Earnest seems to take a very personal approach to each customer. A customer states an amount they can pay each month and Earnest will give them a loan, accordingly. Earnest also lets borrowers skip a payment each year. This could come in handy if money gets tight around the holidays. Just keep in mind, this can increase your future payments to compensate for the missed on.

Fixed interest rates start at 3.35% and variable interest rates start at 2.79%.

However, Earnest isn’t available for all US residents.

Final Thoughts

LendKey runs a fantastic student loan refinancing division. The company offers many, many customizable options with very few downsides. With no application fee, it’s worth seeing what this student loan refinancing powerhouse can do for you.

Customize Student Loan Offers with Magnify Tool

 *We’ll receive a referral fee if you click on offers with this symbol. This does not impact our rankings or recommendations. You can learn more about how our site is financed here.

Will Lipovsky
Will Lipovsky |

Will Lipovsky is a writer at MagnifyMoney. You can email Will at will@magnifymoney.com

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College Students and Recent Grads, Pay Down My Debt

19 Options to Refinance Student Loans in 2017 – Get Your Lowest Rate

The editorial content on this page is not provided by any financial institution and has not been reviewed, approved or otherwise endorsed by any of these entities.

19 Options to Refinance Student Loans - Get Your Lowest Rate

Updated: July 13, 2017

Are you tired of paying a high interest rate on your student loan debt? You may be looking for ways to refinance your student loans at a lower interest rate, but don’t know where to turn. We have created the most complete list of lenders currently willing to refinance student loan debt.

You should always shop around for the best rate. Don’t worry about the impact on your credit score of applying to multiple lenders: so long as you complete all of your applications within 14 days, it will only count as one inquiry on your credit score. You can see the full list of lenders below, but we recommend you start here, and check rates from the top 4 national lenders offering the lowest interest rates. These 4 lenders also allow you to check your rate without impacting your score (using a soft credit pull), and offer the best rates of 2017:

Lender Transparency Score Max Term Fixed APR Variable APR Max Loan Amount
SoFi A+ 20

Years

3.35% – 6.74%

Fixed Rate*

2.80% – 6.72%

Variable Rate*

No Max

Undergrad/Grad
Max Loan

apply-now
earnest A+ 20

Years

3.35% – 6.49%

Fixed Rate

2.79% – 6.46%

Variable Rate

No Max

Undergrad/Grad
Max Loan

apply-now
commonbond A+ 20

Years

3.35% – 6.74%

Fixed Rate

2.79% – 6.72%

Variable Rate

No Max

Undergrad/Grad
Max Loan

apply-now
lendkey A+ 20

Years

3.25% – 7.26%

Fixed Rate

2.66% – 6.06%

Variable Rate

$125k / $175k

Undergrad/Grad
Max Loan

apply-now

We have also created:

But before you refinance, read on to see if you are ready to refinance your student loans.

Can I Get Approved?

Loan approval rules vary by lender. However, all of the lenders will want:

  • Proof that you can afford your payments. That means you have a job with income that is sufficient to cover your student loans and all of your other expenses.
  • Proof that you are a responsible borrower, with a demonstrated record of on-time payments. For some lenders, that means that they use the traditional FICO, requiring a good score. For other lenders, they may just have some basic rules, like no missed payments, or a certain number of on-time payments required to prove that you are responsible.

If you are in financial difficulty and can’t afford your monthly payments, a refinance is not the solution. Instead, you should look at options to avoid a default on student loan debt.

This is particularly important if you have Federal loans.

Don’t refinance Federal loans unless you are very comfortable with your ability to repay. Think hard about the chances you won’t be able to make payments for a few months. Once you refinance, you may lose flexible Federal payment options that can help you if you genuinely can’t afford the payments you have today. Check the Federal loan repayment estimator to make sure you see all the Federal options you have right now.

If you can afford your monthly payment, but you have been a sloppy payer, then you will likely need to demonstrate responsibility before applying for a refinance.

But, if you can afford your current monthly payment and have been responsible with those payments, then a refinance could be possible and help you pay the debt off sooner.

Is it worth it? 

Like any form of debt, your goal with a student loan should be to pay as low an interest rate as possible. Other than a mortgage, you will likely never have a debt as large as your student loan.

If you are able to reduce the interest rate by re-financing, then you should consider the transaction. However, make sure you include the following in any decision:

Is there an origination fee?

Many lenders have no fee, which is great news. If there is an origination fee, you need to make sure that it is worth paying. If you plan on paying off your loan very quickly, then you may not want to pay a fee. But, if you are going to be paying your loan for a long time, a fee may be worth paying.

Is the interest rate fixed or variable?

Variable interest rates will almost always be lower than fixed interest rates. But there is a reason: you end up taking all of the interest rate risk. We are currently at all-time low interest rates. So, we know that interest rates will go up, we just don’t know when.

This is a judgment call. Just remember, when rates go up, so do your payments. And, in a higher rate environment, you will not be able to refinance to a better option (because all rates will be going up).

We typically recommend fixing the rate as much as possible, unless you know that you can pay off your debt during a short time period. If you think it will take you 20 years to pay off your loan, you don’t want to bet on the next 20 years of interest rates. But, if you think you will pay it off in five years, you may want to take the bet. Some providers with variable rates will cap them, which can help temper some of the risk.

Places to Consider a Refinance

If you go to other sites they may claim to compare several student loan offers in one step. Just beware that they might only show you deals that pay them a referral fee, so you could miss out on lenders ready to give you better terms. Below is what we believe is the most comprehensive list of current student loan refinancing lenders.

You should take the time to shop around. FICO says there is little to no impact on your credit score for rate shopping as many providers as you’d like in a single shopping period (which can be between 14-30 days, depending upon the version of FICO). So set aside a day and apply to as many as you feel comfortable with to get a sense of who is ready to give you the best terms.

Here are more details on the 5 lenders offering the lowest interest rates:

1. SoFi: Variable Rates from 2.80% and Fixed Rates from 3.35% (with AutoPay)*

SoFi

SoFi (read our full SoFi review) was one of the first lenders to start offering student loan refinancing products. More MagnifyMoney readers have chosen SoFi than any other lender. Although SoFi initially targeted a very select group of universities (it started with Stanford), now almost anyone can apply, including if you graduated from a trade school. The only requirement is that you graduated from a Title IV school. You need to have a degree, a good job and good income in order to  qualify. SoFi wants to be more than just a lender. If you lose your job, SoFi will  help you find a new one. If you need a mortgage for a first home, they are there  to help. And, surprisingly, they also want to get you a date. SoFi is famous for  hosting parties for customers across the country, and creating a dating app to  match borrowers with each other.

GO TO SITE Secured

on SoFi’s secure website

2. Earnest: Variable Rates from 2.79% and Fixed Rates from 3.35% (with AutoPay) 

Earnest

Earnest (read our full Earnest review) offers fixed interest rates starting at 3.35% and variable rates starting at 2.79%. Unlike any of the other lenders, you can switch between fixed and variable rates throughout the life of your loan. You can do that one time every six months until the loan is paid off. That means you can take advantage of the low variable interest rates now, and then lock in a higher fixed rate later. You can choose your own monthly payment, based upon what you can afford (to the penny). Earnest also offers bi-weekly payments and “skip a payment” if you run into difficulty.

3. CommonBond: Variable Rates from 2.79% and Fixed Rates from 3.35% (with AutoPay)

CommonBond

CommonBond (read our full CommonBond review) started out lending exclusively to graduate students. They initially targeted doctors with more than $100,000 of debt. Over time, CommonBond has expanded and now offers student loan refinancing options to graduates of almost any university (graduate and undergraduate). In addition (and we think this is pretty cool), CommonBond will fund the education of someone in need in an emerging market for every loan that closes. So not only will you save money, but someone in need will get access to an education.

4. LendKey: Variable Rates from 2.66% and Fixed Rates from 3.25% (with AutoPay)

Lendkey

LendKey (read our full LendKey review) works with community banks and credit unions across the country. Although you apply with LendKey, your loan will be with a community bank. If you like the idea of working with a credit union or community bank, LendKey could be a great option. Over the past year, LendKey has become increasingly competitive on pricing, and frequently has a better rate than some of the more famous marketplace lenders.

In addition to the Top 4 (ranked by interest rate), there are many more lenders offering to refinance student loans. Below is a listing of all providers we have found so far. This list includes credit unions that may have limited membership. We will continue to update this list as we find more lenders. This list is ordered alphabetically:

  • Alliant Credit Union: Anyone can join this credit union. Interest rates start as low as 4.25% APR. You can borrow up to $100,000 for up to 25 years.
  • Citizens Bank: Variable interest rates range from 2.77% APR – 8.62% APR and fixed rates range from 4.74% – 8.24%. You can borrow for up to 20 years. Citizens also offers discounts up to 0.50% (0.25% if you have another account and 0.25% if you have automated monthly payments).
  • College Avenue: If you have a medical degree, you can borrow up to $250,000. Otherwise, you can borrow up to $150,000. Fixed rates range from 4.65% – 7.50% APR. Variable rates range from 4.01% – 7.01% APR.
  • Credit Union Student Choice: If you like credit unions and community banks, we recommend that you start with LendKey. However, if you can’t find a good loan from a LendKey partner, this tool could be helpful. Just check to see if you or an immediate family member belong to one of their featured credit union and you can apply to refinance your loan.
  • Laurel Road (formerly known as DRB) Student Loan: Laurel Road offers variable rates ranging from 3.76% – 6.42% APR and fixed rates from 4.20% – 7.20% APR. Rates vary by term, and you can borrow up to 20 years.
  • Eastman Credit Union: Credit union membership is restricted (see eligibility here). Fixed rates start at 6.50% and go up to 8% APR.
  • Education Success Loans: This company has a unique pricing structure: your interest rate is fixed and then becomes variable thereafter. You can fix the rate at 4.99% APR for the first year, and it is then becomes variable. The longest you can fix the rate is 10 years at 7.99%, and it is then variable thereafter. Given this pricing, you would probably get a better deal elsewhere.
  • EdVest: This company is the non-profit student loan program of the state of New Hampshire which has become available more broadly. Rates are very competitive, ranging from 3.94% – 7.54% (fixed) and 3.16% – 6.76% APR (variable).
  • First Republic Eagle Gold. The interest rates are great, but this option is not for everyone. Fixed rates range from 2.35% – 3.95% APR. You need to visit a branch and open a checking account (which has a $3,500 minimum balance to avoid fees). Branches are located in San Francisco, Palo Alto, Los Angeles, Santa Barbara, Newport Beach, San Diego, Portland (Oregon), Boston, Palm Beach (Florida), Greenwich or New York City. Loans must be $60,000 – $300,000. First Republic wants to recruit their future high net worth clients with this product.
  • IHelp: This service will find a community bank. Unfortunately, these community banks don’t have the best interest rates. Fixed rates range from 4.65% to 8.84% APR (for loans up to 15 years). If you want to get a loan from a community bank or credit union, we recommend trying LendKey instead.
  • Navy Federal Credit Union: This credit union offers limited membership. For men and women who serve (or have served), the credit union can offer excellent rates and specialized underwriting. Variable interest rates start at 3.42% and fixed rates start at 4.00%.
  • Purefy: Only fixed interest rates are available, with rates ranging from 3.95% – 6.75% APR. You can borrow up to $150,000 for up to 15 years. Just answer a few questions on their site, and you can get an indication of the rate.
  • RISLA: Just like New Hampshire, the state of Rhode Island wants to help you save. You can get fixed rates starting as low as 3.49%. And you do not need to have lived or studied in Rhode Island to benefit.
  • UW Credit Union: This credit union has limited membership (you can find out who can join here, but you had better be in Wisconsin). You can borrow from $5,000 to $60,000 and rates start as low as 2.76% (variable) and 4.04% APR (fixed).
  • Wells Fargo: As a traditional lender, Wells Fargo will look at credit score and debt burden. They offer both fixed and variable loans, with variable rates starting at 4.49% and fixed rates starting at 6.24%. You would likely get much lower interest rates from some of the new Silicon Valley lenders or the credit unions.

You can also compare all of these loan options in one chart with our comparison tool. It lists the rates, loan amounts, and kinds of loans each lender is willing to refinance. You can also email us with any questions at info@magnifymoney.com.

 

Nick Clements
Nick Clements |

Nick Clements is a writer at MagnifyMoney. You can email Nick at nick@magnifymoney.com

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College Students and Recent Grads, Pay Down My Debt, Reviews

CommonBond Student Loan Refinance Loan Review

The editorial content on this page is not provided by any financial institution and has not been reviewed, approved or otherwise endorsed by any of these entities.

CommonBond Grad Student Loan Refinance Loan Review

Updated July 10, 2017

CommonBond was founded by three Wharton MBAs who felt the sting of student loans after they graduated. The founders decided to provide a better solution for graduates, as they thought the student loan system was broken and in need of reform. As a result, they strive to make the refinance (and borrowing) process as simple and straightforward for graduates as possible.

CommonBond* began by servicing students from just one school, and has rapidly expanded. Today, CommonBond loans are available to graduates of over 2,000 schools nationwide. Although the business started servicing only students with graduate degrees, today CommonBond is also available to refinance undergraduate degrees as well.

CommonBond is one of the top four lenders identified by MagnifyMoney to refinance student loans.

As you might be able to tell by the name, CommonBond thinks of its community as family. There is a network of alumni and professionals within the community that want to help borrowers. This alone sets it apart from other lenders, as members often meet for events.

While these are all great things, we know you’re more interested in how CommonBond might be able to help you make your student loans more affordable. Let’s take a look at what terms and rates they offer, eligibility requirements, and how they compare against other lenders.

Refinance Terms Offered

CommonBond offers low variable and fixed rate loans. Variable rates range from 2.79% – 6.72% APR, and fixed rates range from 3.35% – 6.74% APR.

Note that these rates take a 0.25% auto pay discount into consideration.

There is no maximum loan amount. CommonBond will lend what you can afford to repay. CommonBond offers fixed and variable rates with terms of 5, 7, 10, 15, and 20 years.

The hybrid loan is only offered on a 10 year term – the first 5 years will have a fixed rate, and the 5 years after that will have a variable rate.

CommonBond has a great chart listing repayment examples based off of borrowing $10,000, which can be found on its rates and terms page.

To pull an example from that, if you borrow $10,000 at a fixed 4.74% APR on a 10 year term, your monthly payment will be $104.80. The total amount you will pay over the 10 year period will be $12,575.90.

The Pros and Cons

CommonBond is available to graduates of 2,000 universities. While that is a very long list, not all colleges and universities are included.

One pro to consider is the hybrid loan option available. It might seem a little confusing at first – why would someone want a variable rate down the road?

If you’re confident you’ll be able to make extra payments on your loan and pay it off before the 5 years are up, you might be better off going with the hybrid option (if you can get a better interest rate on it).

This is because you’ll end up paying less over the life of the loan with a lower interest rate. If you were offered a 10 year loan with a fixed rate of 6.49% APR, and a hybrid loan with a beginning rate of 5.64%, the hybrid option would be the better deal if you’re intent on paying it off quickly.

What You Need to Qualify

CommonBond doesn’t list many eligibility requirements on its website, aside from the following:

  • You must be a U.S. citizen or permanent resident
  • You must have graduated

CommonBond doesn’t specify a minimum credit score needed, but based on the requirements of other lenders, we recommend having a score of 660+, though you should be aiming for 700+. The good news is CommonBond lets you apply with a cosigner in case your credit isn’t good enough.

Documents and Information Needed to Apply

CommonBond’s application process is very simple – it says it takes as little as 2 minutes to complete. Initially, you’ll be asked for basic information such as your name, address, and school.

Once you complete this part, CommonBond will perform a soft credit pull to estimate your rates and terms.

If you want to move forward with the rates and terms offered, you’ll be required to submit documentation and a hard credit inquiry will be conducted. CommonBond lists the following as required:

  • Pay stubs or tax returns (proof of employment)
  • Diploma or transcript (proof of graduation)
  • Student loan bank statement
  • ID, utility bills, lease agreement (proof of residency)

CommonBond also notes it can take up to 5 business days to verify documents submitted, so the loan doesn’t happen instantaneously.

Once your documents are approved, you electronically sign for the loan, and CommonBond will begin the process of paying off your previous lenders. It notes this can take up to two weeks from the time the loan is accepted.

Who Benefits the Most from Refinancing Student Loans with CommonBond?

Borrowers who are looking to refinance a large amount of student loan debt will benefit the most from refinancing with them.

Keeping an Eye on the Fine Print

CommonBond does not have a prepayment penalty, and there are no origination fees nor application fees associated with refinancing.

As with other lenders, there is a late payment fee. This is 5% of the unpaid amount of the payment due, or $10, whichever is less.

If a payment fails to go through, you’ll be charged a $15 fee.

It’s also noted that failure to make payments may result in the loss of the 0.25% interest rate deduction from auto pay.

Transparency Score

Getting in touch with a representative is simple and there is a chat and call option right on the homepage. Some lenders have this hidden at the bottom, or they don’t offer a chat option at all.

CommonBond also lets borrowers know they can shop around within a 30 day period to lessen the impact on their credit.

It does not list its late fees on its website, unlike other lenders. However, after making a chat inquiry, the question was answered promptly.

CommonBond does offer a cosigner release and is ranked with a A+ transparency score.

Alternative Student Loan Refinancing Lenders

The student loan refinancing market continues to get more competitive, and it makes sense to shop around for the best deal.

One of the market leaders is SoFi. It’s always worth taking a look to see if SoFi* offers a better interest rate.

The two lenders are very similar – CommonBond offers “CommonBridge,” a service that helps you find a new job in the event you lose yours. SoFi offers a similar service called Unemployment Protection.

SoFi’s variable rates are currently 2.795% – 6.720% APR with autopay, and its fixed rates are currently 3.35% – 6.74% APR, which is in line with what CommonBond is offering.

SoFi also doesn’t have a limit on how much you can refinance with them.

SoFi

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Another lender to consider is Earnest. There is no maximum loan amount, and Earnest has a very slick application process. Interest rates start as low as 2.79% (variable) and 3.35% (fixed).

Lastly, you could check out LendKey. It offers student loan refinancing through credit unions and community banks, but only offers variable rates in most states and fixed rates in a select few. The maximum amount to refinance with an undergraduate degree is $125,000, and the maximum amount to refinance with a graduate degree is $175,000.

All three of these options provide forbearance in case of economic hardship and offer similar loan options (5, 10, 15 year terms).

Don’t Forget to Shop Around

As CommonBond initially conducts a soft pull on your credit, you’re free to continue to shop around for the best rates if you’re not happy with the rates it can provide. As the lender states on its website, if you apply for loans within a 30 day period, your credit won’t be affected as much.

Since CommonBond does have strict underwriting criteria, you should continue to shop around and don’t be discouraged if you are not approved. The market continues to get more competitive, and a number of good options are out there.

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Erin Millard
Erin Millard |

Erin Millard is a writer at MagnifyMoney. You can email Erin at erinm@magnifymoney.com

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College Students and Recent Grads, Credit Cards, Reviews

Altra Federal Credit Union Student Visa Review: Great Savings for Future Auto Loans

The editorial content on this page is not provided by any financial institution and has not been reviewed, approved or otherwise endorsed by any of these entities.

The Altra Federal Credit Union Student Visa card is made for college students and helps you build credit while also taking advantage of rewards. You’ll earn 1 point per dollar spent, and double points during the 60 days after opening your card. The rewards points can be redeemed for cash back, travel, merchandise, and more. This card is especially beneficial if you plan on taking out an auto loan in the next few years, as you may be eligible to redeem rewards points for a .25% or .50% interest reduction on an Altra auto loan. The various features Altra provides make this card a good option for students starting their credit journey.

Altra Federal Credit Union Student Visa

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Altra Federal Credit Union Student Visa

Annual fee
$0 For First Year
$0 Ongoing
Rewards
1 point per dollar spent
APR
14.90%

Fixed

Credit required
zero-credit
New to Credit
  • Earn double Reward Points on every dollar of purchases in the first 60 days after opening your new account. After, earn 1 point per dollar spent.
  • Points can be redeemed for cash back, travel rewards and merchandise.
  • Redeem 5,000 CU reward points for a .25% point reduction or 10,000 points for a .5% point reduction off an Altra vehicle loan.
  • Each quarter one random cardholder will have their previous month’s purchases paid (up to $500, $50 minimum).
  • Receive a one-year congratulatory letter rewarding you with $20 for maintaining your account in an “exceptional way.”

How the Card Works

Altra offers a credit card designed with students in mind to help you build credit. There is no annual fee for this card, though you may have to pay a $5 membership fee; but more on that later. In addition to a low 14.90% APR, Visa Checkout, and fraud alerts, Altra offers a rewards program. You will earn 1 point per dollar spent on all purchases and will earn double points during the 60 days after opening your new account. This allows you to get a rewards boost while you’re in the honeymoon phase of being a cardholder. However, this may not be the largest rewards program compared to other cards, but it is better than no rewards.

The reward points that Altra offers do not have a standard value like most rewards programs. Instead, points can be redeemed for merchandise or cash back at CURewards.com. Note that there is only one cash back option of $50, and you need 8,334 points to redeem. So you would need to spend $8,334 to receive $50 cash back.

Although you earn unlimited rewards points, they expire after five years — but on the last day of the year. For example, if you earned points on June 1, 2017, they would expire in five years but on the last day of the fifth year — December 31, 2022. As a result, think twice about saving all your points for a large reward because you may lose them.

In addition to a rewards program, Altra will give you a $20 cash back reward at the end of your first year as a cardholder. All you need to do to qualify is to maintain your account in an “exceptional” manner by having no late payments, no over-the-limit usage, and 6 out of 12 months’ activity. This should be an easy $20 since your goal is to pay every statement in full each month.

If that isn’t enough, Altra will choose one cardholder at random each quarter and pay their previous month’s purchases, with a minimum of $50 and maximum of $500 paid. To qualify for this “lottery” you need to be in good standing, which means you pay your bill on time and in full every month, and wait for your lucky day!

If you plan on taking out an auto loan in the next few years, Altra has a unique offer that can save you significant money. You are able to redeem 5,000 points for a .25% interest reduction or 10,000 points for a .50% interest reduction on your Altra auto loan.

Keep in mind that your primary goal with a student card is to create a positive credit history with the hopes of having a credit score in the 700s upon graduation. Don’t let the prospect of rewards hinder your credit and lead to overspending. Some best practices to promote a positive credit score include paying each statement in full and on time and using no more than 20% of your credit limit — meaning don’t max out your card.

How to Qualify

Altra designed this card with students in mind, which means they don’t expect you to have a great credit history, or any at all. Though they do expect you to have a stable source of income, so a job is needed to apply for this card. This will prove that you can afford to make your monthly payments on time and are responsible.

Another requirement Altra has that is unique to credit unions is that you need to be a member to become a cardholder. No worries, though, since the application process is simple. You can either qualify for membership via various eligibility options or by joining the credit union for $5. In addition, while you’re actively using the card you will need to keep $5 in a savings account.

What We Like About the Card

Low APR.

Altra offers a relatively low 14.90% APR, compared to other cards that offer APRs as high as 24.74%. The low APR is beneficial if you don’t pay your balance in full one month and as a result are charged interest. It helps that Altra has an APR 10% lower than competing cards; however, you should always pay your bill in full every month to avoid interest charges and damage to your credit score.

Earn rewards points.

Altra provides you the opportunity to build your credit while also earning rewards. With this card you can earn 1 reward point per dollar spent. Even better is that during the first 60 days after opening your account you will earn double rewards points. Don’t let this get to your head and spend more than you can to maximize your double points. Remember that your primary goal is to build good credit, and earning rewards is only an added bonus. It’s important to note that Altra rewards points do not have a standard value like typical rewards programs from other credit cards. Point value varies based on each redeemable item.

$20 cash back for good behavior.

If at the end of your first year as a cardholder you have no late payments, no over-the-limit usage, and used your card for 6 out of 12 months, you will receive a $20 cash back reward. This is an added perk for responsible cardholders that makes Altra’s card more appealing.

Random winner each quarter.

An added level of excitement is Altra’s bill pay “lottery.” Each quarter Altra will choose one random cardholder and pay their previous month’s purchases, anywhere between $50 and $500. Make sure you’re in good standing to qualify.

Redeem points for a lower interest rate on an Altra vehicle loan.

If a car is in your near future, Altra provides a great option that can save you money. You will receive a .25% or .50% point reduction on your loan by redeeming 5,000 and 10,000 points, respectively. This may save you a significant amount of cash in the long run.

What We Don’t Like About the Card

Foreign transaction fee.

Be careful if you travel abroad since this card charges a 1% foreign transaction fee. This isn’t as high as some cards that charge 3%; however, you can find other student cards that don’t charge a fee when you’re traveling out of the country, such as the Discover it for Students card or the Capital One Journey Student Rewards card.

Need to join the Altra Federal Credit Union.

Unlike credit cards from banks, you have to be a member of the Altra FCU. There are two ways to become a member, and the first option — meet their eligibility requirements — is free. Otherwise you will need to pay a one-time $5 membership fee. All members will also need to have a $5 balance in an Altra savings account that must remain in the account while you have the card open.

Who the Card Is Best For

If you’re a student who doesn’t mind joining a credit union and wants to earn rewards while building your credit score, this card may be right for you. We recommend this card for students who plan on taking out an auto loan since you can benefit greatly from the .25% or .50% interest reduction Altra offers. With numerous cardholder benefits, the Altra FCU Student Visa card is a good choice for students starting their credit journey.

Alternatives

If You Frequently Spend on Gas, Groceries, and Restaurants

The Golden 1 Credit Union Platinum Rewards for Students card is a great card if you want to receive a cash rebate for your purchases. With Golden 1 you will earn a cash rebate instead of rewards points that will be deposited into your account at the end of every month. The cash rebate program also boasts a high 3% rebate for gas, grocery, and restaurant purchases, with 1% for all other purchases. If you frequently spend money in these areas, you’ll be able to maximize your cash rebate. You can become a member of Golden 1 by joining the Financial Fitness Association for $8 per year and keeping at least $5 in a savings account.

If a Credit Union Isn’t for You

Not everyone wants to join a credit union, and there are numerous student credit cards offered by banks. The Discover it for Students card is a great card to help you build credit while earning cash back. With Discover you will earn 5% cash back on quarterly rotating categories and 1% elsewhere — but it doesn’t end there. They also reward students with good grades, match your cash back at the end of the first year, and provide access to your FICO score for free. Overall, Discover is a great card for students who don’t mind tracking rotating categories to maximize cash back.

FAQ

It’s a smart choice to start building your credit while you’re in college so by the time you graduate you have a healthy credit score in the high 600s to mid 700s. As a result, you’ll be in good standing with financial institutions and will benefit from being able to make larger purchases like a new car. Also, if you want to get an additional credit card that offers cash back or rewards, you will be more likely to get approved with a good credit score. Check out our student credit card guide.

To join the Altra Federal Credit Union you may already meet several eligibility options that come at no cost. If not, there is a one-time $5 membership fee. You will also need to have a $5 balance in an Altra savings account that must remain while you have the card open.

You should work hard to make sure you make payments on time every month. A missed payment will lead to a late fee and interest accruing on the balance. This will ultimately leave a negative mark on your credit report and lower your credit score. Try not to spend more than you are able to and stick to a budget with these helpful budgeting apps.

If a credit card isn’t the right product for you, don’t fret, there are other options available. You can build credit by using a secured card or by becoming an authorized user on your parents’ account. A secured card is where you deposit an amount of money that acts as collateral, and the amount you deposit becomes your credit limit. This is a great way to build credit with less risk than a typical credit card. Compare the best secured cards for your needs. Your second option, becoming an authorized user, allows you to piggyback off of someone else’s good credit. You will receive their good credit behavior on your credit report.

Alexandria White
Alexandria White |

Alexandria White is a writer at MagnifyMoney. You can email Alexandria at alexandria@magnifymoney.com

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College Students and Recent Grads, Reviews, Student Loan ReFi

SoFi Parent PLUS Loan Refinance Review

The editorial content on this page is not provided by any financial institution and has not been reviewed, approved or otherwise endorsed by any of these entities.

Senior Couple Talking To Financial Advisor At Home

Updated July 3, 2017

Are you a parent who wanted to help your child finance his or her education, and ended up taking out more loans than anticipated? Many parents find themselves in a precarious situation as they try to plan for retirement and while balancing student loan debt.

If you’re looking to save on the amount of interest you’re paying, SoFi’s Parent PLUS loan refinance program may be right for you.

Details of the Parent PLUS Loan

You can refinance a minimum of $5,000 under SoFi. Fixed rates range from 3.35% to 6.74% APR and variable rates range from 2.80% – 6.47% APR (these rates assume you enroll in autopayment).

Terms of 5, 7, 10, and 15 years are available. Variable rates on terms of 5, 7, and 10 years are capped at 8.95%, while the 15 year term is capped at 9.95%.

An example payment looks like this: if you refinance $10,000 on a 5 year term with a fixed APR of 5.49%, your monthly payment will be $190.97 and you’ll pay a total of $11,457.93 over the life of the loan. If you refinance $10,000 on a 5 year term with a variable APR of 4.2%, your monthly payment will be $185.07 and you’ll pay a total of $11,104.43.

How Does the Parent PLUS Loan From SoFi Compare to a Federal PLUS Loan?

The interest rate for Federal Direct PLUS Loans disbursed on or after July 1st, 2015 and before July 1st, 2016 is 6.84%. During much of the 2000s, interest rates were higher. Currently, interest rates are fixed – variable rates are unavailable.

Most people are looking to refinance to save money, and SoFi offers very competitive rates compared with the Direct PLUS Loan, especially on variable rates.

While there are no fees to refinance, you should calculate your estimated savings before going through the process. Be aware if you do refinance, you’ll lose out on certain benefits that come with having Federal student loans, such as deferment, forbearance, and various repayment options.

PLUS loans made to parents are eligible for the Graduated or Extended Repayment Plans, and Direct PLUS loans are also eligible for forgiveness. In some cases, PLUS loans can be discharged due to the death of the borrower (or student).

Private loans often don’t extend these same benefits. In fact, SoFi explicitly states on its legal page that this loan “is not discharged in the event of death or permanent disability of the borrower or student on whose behalf the loan is taken out.”

Eligibility Requirements

You must be a U.S. citizen or permanent resident and employed to be approved. SoFi is unable to lend in Nevada, and variable rates aren’t offered in Illinois, Ohio, or Tennessee. The loans must have been used to obtain at least a Bachelor’s degree with an eligible school as well.

There are no specific credit score requirements as SoFi tries to take a broader view of borrowers. It focuses on income and credit history instead.

Application Process and Documents Needed

The application process to refinance a PLUS Loan with SoFi is easy and can be done completely online. The application takes around 15 minutes to complete, and you’ll know whether or not you qualify by going through the pre-approval process first. During this portion of the application, a soft credit inquiry is used. If you decide to move forward with the loan offered to you, a hard credit inquiry will be used.

You’ll be asked to upload a few documents, so it’s a good idea to have the following ready to go:

  • Proof of residence – ID with matching address, otherwise a utility bill dated within the last 60 days is okay
  • Proof of income – most recent pay stubs
  • Proof of citizenship – a passport or birth certificate can be provided
  • Verification of loans – most recent loan statements for the loans you’re refinancing

Once you submit this documentation, SoFi’s review team gets to work on evaluating your loan. If no other documentation is needed, reviews can take anywhere from 2 to 3 weeks to complete.

The Fine Print

There isn’t an origination fee or application fee, and there are no prepayment penalties. Rates are determined on a number of factors, including the term you choose, your income, and your credit history.

There are late fees associated with the loan. The Parent PLUS Refinance program is currently offered through SoFi’s lending partner, Mohela, and it assesses any fees owed. When you receive the paperwork for the loan, the fees can be found under the disclosures.

Repayment Assistance Options

If you’re struggling to repay the loan after refinancing with SoFi, we recommend you contact a representative and make them aware of the situation. The worst thing you can do with any loan is not make a payment.

SoFi offers unemployment protection on a case-by-case basis, during which payments can be paused for a period of 3 to 12 months.

Pros and Cons of SoFi Parent PLUS Loan

Pro: SoFi offers much better rates than the 6.84% fixed rate that comes with Direct PLUS loans. If you have a higher interest rate – around 8% – you’ll stand to benefit even more.

Con: As we mentioned, refinancing means losing out on benefits associated with Federal student loans. If you’re not as concerned about needing repayment assistance, the savings might be enough to make refinancing worthwhile.

Pro: SoFi also offers variable interest rates, whereas the most recent Direct PLUS loans don’t. Variable rates can be tricky, though – SoFi says rates may change on a monthly basis. If you value stability and peace of mind, variable rates may not be for you. If you’re trying to pay off your balance quicker, and a lower interest rate would help, then it might be worth considering this option. 

Con: You may have to extend the repayment term to get a lower monthly payment, as SoFi offers terms up to 15 years. Unfortunately, this increases the amount of interest you’ll pay over the life of the loan. It’s important to use a calculator to estimate how much your savings will be to make sure refinancing is worth it. For example, if you have less than 5 years remaining on your loan, refinancing may not save you a lot of money.

Pro: SoFi offers unemployment protection, and you can also take advantage of SoFi’s career assistance program. If you or your child is experiencing trouble finding employment, it will connect you with its network of alumni and give you tools and tips to succeed in your job search.

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Other Parent PLUS Refinance Alternative

If you don’t qualify with SoFi, you can try these lenders that also offer refinancing options:

CommonBond: Fixed APRs range from 3.35% to 6.74%, and variable APRs range start at 2.79%, and terms offered are 5, 10, 15, and 20 years. CommonBond also has hybrid APRs. Only a 10 year term is offered with this choice; it starts off as fixed for 5 years, and changes over to variable for 5 years. There are no origination fees or application fees, no prepayment penalty, and CommonBond actually allows you to transfer your loan to your child (which isn’t allowed with Federal loans). You can borrow a maximum of $110,000.

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Citizens Bank: Citizens Bank refinances Parent PLUS and Direct PLUS loans through its Education Refinance program. The minimum amount you can refinance is $10,000 and up to $90,000 for Bachelor’s degrees and below, $130,000 for graduate and doctoral degrees, and $170,000 for professional degrees. For a Bachelor’s degree and above, you must have made 3 consecutive monthly payments to refinance. For anything less than a Bachelor’s degree, you must have made 12 consecutive monthly payments. The loan you’re refinancing must be in repayment status and can’t be enrolled in an Income-Based Repayment plan. Fixed APRs start at 6.24%. Terms of 5, 10, 15, or 20 years are offered. You need a minimum income of $24,000 to qualify.

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Be sure to shop around as there are other lenders out there that will refinance PLUS loans – you want to make sure you’re getting the best rates and terms available to you so you can save the most. Shopping around within 30 days will only count as one credit inquiry, so your credit won’t get penalized heavily. Take advantage of this and lessen the burden of student loan payments so you can focus on saving for your future.

We’ll receive a referral fee if you click on the “Apply Now” buttons in this post. This does not impact our rankings or recommendations You can learn more about how our site is financed here.

Erin Millard
Erin Millard |

Erin Millard is a writer at MagnifyMoney. You can email Erin at erinm@magnifymoney.com

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Best of, College Students and Recent Grads, Credit Cards

Best Student Credit Cards of 2017

The editorial content on this page is not provided by any financial institution and has not been reviewed, approved or otherwise endorsed by any of these entities.

Getting a credit card while you’re in college might seem dangerous or confusing. But if you are able to use a student credit card responsibly, you do not need to be afraid, and you can set yourself up for financial success after you leave school.

Fortunately, learning how to choose and use the right student credit card is relatively simple. Make sure you avoid annual fees and go with a bank or credit union you can trust. When you get the card, make sure you use it responsibly and pay the balance in full and on time every month. If you do these things consistently over time, you can leave school with an excellent credit score. And if you want to rent an apartment or buy a car, having a good credit score is very important.

Our Top Pick

Discover it® for Students

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Discover it® for Students

Annual fee
$0 For First Year
$0 Ongoing
Cashback Rate
up to 5%
APR
13.99%-22.99%

Variable

Credit required
fair-credit
Fair Credit, New to Credit
  • Get a dollar-for-dollar match of all the cash back you’ve earned at the end of your first year, automatically.
  • Earn 5% cash back in rotating categories each quarter like Amazon.com, restaurants, ground transportation and more, up to the quarterly maximum each time you activate.
  • Good Grades Rewards: $20 cash back each school year your GPA is 3.0 or higher for up to the next 5 years.
  • No annual fee. No late fee on first late payment. No APR change for paying late.
  • Get 100% U.S. based customer service & your FICO® Credit Score for free on monthly statements, on mobile & online.
  • Freeze It® on/off switch for your account that prevents new purchases, cash advances & balance transfers in seconds.
  • 0% intro APR on purchases for 6 months, then the standard variable purchase APR of 13.99% - 22.99%.
  • Click "APPLY NOW" to see rates, rewards, FICO® Credit Score terms, Cashback Match™ details & other information.

Best for Commuter Students

Discover it® chrome for Students

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Discover it® chrome for Students

Annual fee
$0 For First Year
$0 Ongoing
Cashback Rate
up to 2%
APR
13.99%-22.99%

Variable

Credit required
fair-credit
Fair Credit, New to Credit
  • Get a dollar-for-dollar match of all the cash back you've earned at the end of your first year, automatically.
  • 2% cash back at restaurants and gas stations on up to $1,000 in combined purchases every quarter - no sign-ups needed. 1% cash back on all your other purchases.
  • Good Grades Rewards: $20 cash back each school year your GPA is 3.0 or higher for up to the next 5 years.
  • No annual fee. No late fee on first late payment. No APR change for paying late.
  • Get 100% U.S. based customer service & your FICO® Credit Score for free on monthly statements, on mobile and online.
  • Freeze It® on/off switch for your account that prevents new purchases, cash advances & balance transfers in seconds.
  • 0% intro APR on purchases for 6 months, then the standard variable purchase APR of 13.99% - 22.99%.
  • Click "APPLY NOW" to see rates, rewards, FICO® Credit Score terms, Cashback Match™ details & other information.

Best Flat-Rate Card

Journey Student Credit Card from Capital One

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on Capital One’s secure website

Journey Student Credit Card from Capital One

Annual fee
$0 For First Year
$0 Ongoing
Cashback Rate
up to 1.25%
APR
20.99%

Fixed

Credit required
fair-credit

Average Credit

  • Earn 1% cash back on all your purchases. Pay on time to boost your cash back to a total of 1.25% for that month
  • There’s no limit to the amount of cash back you can earn, and rewards don't expire
  • Get access to a higher credit line after making your first 5 monthly payments on time
  • Pay no annual or foreign transaction fees
  • Fraud coverage if your card is lost or stolen
  • Pick the monthly due date that works best for you

Best Intro Bonus

Wells Fargo Cash Back College℠ Card

Wells Fargo Cash Back College℠ Card

Annual fee
$0 For First Year
$0 Ongoing
Cashback Rate
up to 3%
APR
11.90%-21.90%

Variable

Credit required
fair-credit
Fair Credit
  • Build Credit history while you are in college
  • Earn 3% cash back on gas, grocery and drugstore net purchases (purchases minus returns/credits) for 6 months and 1% cash back on all other net purchases.
  • Earn unlimited cash rewards with no complicated calculations, no minimum purchase requirements and no expiration dates.
  • Flexible rewards redemption options. Cash rewards are redeemed in $25 increments and you can choose to have them automatically deposited into your Wells Fargo savings account or apply rewards as a credit to a qualifying Wells Fargo product. Request a paper check or redeem in $20 increments at a Wells Fargo ATM with a Wells Fargo Debit or ATM card. Redeem rewards for travel, gift cards, and more
  • Extra cash rewards earning potential and deals at your favorite stores when you shop the Earn More Mall®
  • Free access to Wells Fargo Online® credit education and tools

Best Credit Union Card

Altra Federal Credit Union Student Visa

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Altra Federal Credit Union Student Visa

Annual fee
$0 For First Year
$0 Ongoing
APR
14.90%

Fixed

Credit required
zero-credit
New to Credit
  • Earn double Reward Points on every dollar of purchases in the first 60 days after opening your new account. After, earn 1 point per dollar spent.
  • Points can be redeemed for cash back, travel rewards and merchandise.
  • Redeem 5,000 CU reward points for a .25% point reduction or 10,000 points for a .5% point reduction off an Altra vehicle loan.
  • Each quarter one random cardholder will have their previous month’s purchases paid (up to $500, $50 minimum).
  • Receive a one-year congratulatory letter rewarding you with $20 for maintaining your account in an “exceptional way.”

Also Consider Also Consider

Golden 1 Credit Union Platinum Rewards for Students:

This credit card offers a snazzy rewards program: rather than accumulate points, you’ll get a cash rebate instead. All you have to do is make a purchase. At the end of the month, you’ll get a rebate of 3% of gas, grocery, and restaurant purchases, and 1% of all other purchases deposited back into your Golden 1 savings account at the end of the month. You can join Golden 1 by joining the Financial Fitness Association for $8 per year and keeping at least $5 in a savings account.

What should I look for in a student credit card?

The most important thing to consider when looking for a student credit card is that it charges no annual fee. You should never have to pay to build your credit score. Fortunately, most student cards don’t charge you an annual fee, but it’s still something to watch out for.

The second most important thing you should keep an eye out for are tools that help you learn about credit or even promote good credit-building habits. For example, some student credit cards will give you a free monthly FICO score update. You can use this freebie to see in real time how your credit score changes as you build credit history by keeping the card open, or paying down your credit card balance, for example.

The last thing you should be considering when picking out a student credit card is the rewards program. I know, I know, it seems counterintuitive. But stick with me — I’ll show you why in the next question.

Why shouldn’t I be concerned about maximizing my rewards while in college?

Rewards cards are nice to have. But if you’re a college student, here’s the truth: you probably won’t spend enough to earn meaningful rewards.

Why? With a good rewards program, you can earn points or cash back. A small percentage of your monthly spending can add up quickly. However, given the tight budget that most college students live on, it will probably take a while to earn meaningful rewards. For example, if you earn 1.25% cash back and spend $300 a month on your card, you would earn $45 of cash back during the year.

College students are very good at making good use of $45. And our favorite card offers a great cash back rewards program. Just don’t expect to earn a lot of cash back, given the tight budget of a college student.

Why should I get a credit card as a college student?

There are a lot of great reasons why you should get a credit card, as long as you can commit to using it responsibly.

The single biggest reason why you should get a credit card as a college student is because you can start establishing a credit history now. When you graduate from college, you will need a good credit score to get an apartment. And your future employer will likely check your credit report. Building a good credit history while still in college will help prepare you for life after graduation.

Getting a credit card while in college can also train you to develop good credit habits now. But you need to be honest with yourself. If you find that you can’t avoid the temptation of maxing out your credit card, you might want to switch to a debit card or cash.

Finally, getting a credit card now can be the motivation you need to start learning about credit. These skills aren’t hard to learn, and they could save you thousands or even hundreds of thousands of dollars later in life (when you want a mortgage, for example).

What is the CARD Act and why should I care about it?

Many years ago, credit card companies would market on college campuses. You could get a free beer mug or t-shirt in exchange for a credit card application. And you would be able to qualify for a credit card without having any income. The Credit Card Accountability Responsibility and Disclosure (CARD) Act was signed into law in May 2009 to change a number of practices.

How did the CARD Act change student credit cards?

The CARD Act made a lot of changes in how credit card issuers do business with students. One of the biggest changes was requiring students to be able to demonstrate an ability to pay. If you are under 21 and do not have sufficient income (a campus job, for example), you would need to get a co-signer.

In addition, colleges must now limit the amount of credit card marketing on campus. The days of free t-shirts and pizzas in exchange for credit card applications are gone. But that doesn’t mean it is impossible for a college student to get a credit card. Some highly reputable banks and credit unions still offer student cards. And building a good credit score while still in college is still highly recommended.

How can I protect myself from racking up debt?

When used properly, credit cards are a very convenient method of repayment. However, when not used properly, you can end up deep in credit card debt. It is important to establish a healthy relationship to credit now, with your first credit card.

You should try to ensure that you pay off your credit card bill in full and on time every month. Ideally, you should set up an automatic monthly payment. And to keep yourself on track, take advantage of alerts offered by most credit card companies. You can even get daily text messages reminding you of your balance.

How can I automate my credit card usage?

If all of this sounds confusing, don’t worry. There’s actually a way you can automate your payments so you never even have to bother with the hassle of using a credit card. All it takes is a few minutes of upfront work.

First, you’ll need at least one recurring monthly bill of the same amount, such as Netflix or Spotify. Log in to your account and set up an automatic payment each month using your credit card. Make a note of how much your monthly bill costs.

Next, log in to your bank account. Set up a second automatic payment to go to your credit card each month for the same amount as the bill. If your bank doesn’t offer the option to set up automatic payments, you may also be able to set up your credit card to automatically withdraw the amount of the bill from your bank.

Because you know this bill will be for the same amount each month (barring any price increases), you can literally just leave this running in the background each month on autopilot. You don’t even have to carry your credit card in your wallet if you don’t want to. Then, when you graduate, you’ll automatically have an improved credit score!

What happens to my student credit card when I graduate?

Congratulations! You’ve made it to the finish line. But what about your student credit card? You will have a few options once you graduate.

First, you can simply keep it. You will want to keep the credit card open, because it helps you build a long credit history. However, you might want to call your credit card company and ask if you can migrate to a standard (non-student) credit card.

But if you have been using your credit card properly, you will have an excellent credit score when you graduate – and you will be able to get any credit card that you want.

Here is a summary of our favorite cards:

Credit cards
Best for
Lindsay VanSomeren
Lindsay VanSomeren |

Lindsay VanSomeren is a writer at MagnifyMoney. You can email Lindsay here

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College Students and Recent Grads, Reviews

Review: Journey Student Rewards from Capital One

The editorial content on this page is not provided by any financial institution and has not been reviewed, approved or otherwise endorsed by any of these entities.

If you are a college student looking to build credit, Capital One’s Journey Student Credit Card could be a good option. Most important, there is no annual fee and Capital One is willing to accept people with limited (or no) credit history. Although your credit limit will start out very low, Capital One promises a review of the limit after a short five short months — and good behavior can be rewarded with a higher credit limit. Cash back rewards are a nice added bonus, making this a good first credit card choice. Just make sure you don’t borrow with this card — at 20.99%, the interest rate is high.

Journey Student Credit Card from Capital One

APPLY NOW Secured

on Capital One’s secure website

Journey Student Credit Card from Capital One

Annual fee
$0 For First Year
$0 Ongoing
Cashback Rate
up to 1.25%
APR
20.99%

Fixed

Credit required
fair-credit

Average Credit

  • Earn 1% cash back on all your purchases. Pay on time to boost your cash back to a total of 1.25% for that month
  • There’s no limit to the amount of cash back you can earn, and rewards don't expire
  • Get access to a higher credit line after making your first 5 monthly payments on time
  • Pay no annual or foreign transaction fees
  • Fraud coverage if your card is lost or stolen
  • Pick the monthly due date that works best for you

How the Card Works

Capital One is one of the largest credit card issuers in the country. With Journey it has created a credit card specifically designed for students looking to build their credit score and have access to the convenience of paying by credit card.

Capital One created the concept of “low and grow.” That means you will receive a very low credit limit at first (that could be as low as $500). If you demonstrate good behavior, your credit limit will grow over time. Capital One promises a review after just five months. If you make your first five monthly payments on time, you will be rewarded with a higher credit limit quickly.

The card also comes with a decent cash back rewards proposition. You will earn 1% cash back on all of your purchases. So long as you make your payments on time, you will get a bonus of 0.25%. That means responsible cardholders will earn 1.25% cash back. In general, MagnifyMoney does not get excited about rewards for student cards. Because the limit is so small, the amount of cash back that you can earn will be limited. However, 1.25% cash back on all purchases is a nice added bonus for students.

There are a few extra perks with this card. There is no foreign transaction fee, which is great for any student looking to study abroad or backpack across Europe. You will also be able to see your CreditWise credit score for free. CreditWise offers free access to your TransUnion VantageScore 3.0 credit score. Almost every credit card issuer now offers access to a free credit score (making the benefit less exciting). However, because the goal of a student card is to build your credit score, being able to watch it improve in real time is a nice benefit. We also like that, with CreditWise, you have access to interactive tools that let you see how your behavior will impact your score over time.

Just remember: your goal with a student card is to have an excellent score (above 700) when you graduate from college. To do that, you should focus on three steps. First, use your card every month. Second, try to keep your statement balance below 10%-20% of your credit limit. That means if you have a $500 credit limit, don’t spend more than $50-$100 a month on the card. That keeps your utilization low. Third, pay your statement balance in full and on time every month. By doing this, you avoid paying any interest. With this card — you also get the full 1.25% cash back. And, most important, you build a strong credit history.

How to Qualify for the Card

Although this card targets students, you do not actually need to be a student in order to get the card. Capital One makes it clear that this card is for people with “average credit.” In particular, people with average credit have limited credit history. If you have had a credit card for less than three years, you would be considered “average.” If you have no credit or are new to the country, you would also be considered average by Capital One.

In order to be approved, you will need to have income. Because students are being targeted with this card, the income requirements will be much lower than for a normal card. However, if you don’t have a way of repaying your card, you will not be able to get one. And a parental allowance is not considered income.

Just remember: Because Capital One will accept people with limited or no credit history, the credit limit will be low and the interest rate will be high.

What We Like About the Card

We believe this card could be a great choice for a college student looking to build credit. Here is what we like most.

No annual fee.

As a college student, every penny counts. And no college student should have to pay a fee to build their credit score. Fortunately, there are a number of credit card companies willing to offer student credit cards with no annual fee, and Capital One Journey is one of them.

No foreign transaction fees.

Although the primary reason you get a student card is to build your score, having a card can be particularly helpful — especially if you are studying or traveling abroad. Foreign transaction fees of 3% or more can end up costing a lot of money. Fortunately, Capital One does not charge foreign transaction fees, and you can use your card overseas without worrying about annoying fees.

Rewards good behavior.

With your first credit card, it is important to start building responsible money habits. This card rewards good behavior. If you make your payments on time, you get a 25% boost in the cash back that you earn. And if you consistently make your payments on time, your credit limit will be increased (which can help you with your credit score, when used responsibly).

And yes, you get rewards.

When selecting a credit card, paying no annual fee is the most important feature. Although we wouldn’t recommend selecting a student credit card based upon cash back or miles, it is a nice added perk for the Capital One card. If you have a $500 limit and do not spend more than $100 a month on the card, you will only earn $15 of cash back per year (at the 1.25% rate). And we do not recommend spending more money to get more cash back — that is a bad strategy.

What We Don’t Like About the Card

Very high interest rate.

The credit card charges a 20.99% interest rate to everyone who is accepted. College students have enough to worry about with student loans — they shouldn’t be taking on additional debt as very high, double-digit rates of interest. If you max out a $500 limit and pay only the minimum due, you would end up spending $84 of interest during the first year alone, and would still have a $284 balance remaining. In other words, most of your money would go toward the interest. Just beware: a student credit card is a very expensive way to borrow.

Expensive late fees.

If you miss a payment, you will be hit with a late fee of up to $35. That is a steep price to pay for anyone, let alone a college student. To avoid late fees, make sure you set up automatic monthly payments.

Alternatives to the Card

There are a number of other options out there. We think you should avoid any student card that charges an annual fee. But here are two good options that don’t charge a fee.

If You Want to Earn More Rewards

If you want to earn more cash back, Discover is our favorite option. Discover it® for Students does not charge an annual fee and provides free access to your FICO score. And it does something we really like: it offers a “Good Grades Reward.” You will get $20 cash back each school year your GPA is 3.0 or higher for up to the next 5 years. That is on top of a cash back rewards program that pays 5% cash back in rotating categories each quarter like Amazon.com, restaurants, ground transportation and more, up to the quarterly maximum each time you activate. Plus, unlimited 1% cash back on all other purchases. And you can get a dollar-for-dollar match of all the cash back you’ve earned at the end of your first year, automatically.

If You Want an Intro Bonus

If you would like to earn a nice intro bonus, consider the Citi ThankYou Preferred Card for College Students. You will earn 2,500 ThankYou points after spending $500 during the first three months. You will also be able to earn 2 points for every $1 you spend on dining and entertainment. Plus, you get 1 point for every $1 spent on everything else. Depending on how you redeem, 100 points could equal $1.

Who Benefits Most from the Card

If you are a college student looking to build your credit history, this is a great card. You do not have to pay an annual fee, and your credit limit will increase after just five months of on-time payments. The card also has a decent reward structure and no foreign transaction fee, making this a solid choice. You could probably earn more rewards at Discover (with its good grade bonus) or at Citi (at least in the first year with its sign-on bonus), but any of these would be solid options so long as you keep your balance low and pay it in full and on time every month.

Student Credit Card FAQs

Yes, you will need to demonstrate that you have income in order to qualify for the credit card. The credit card company needs to know that you will be able to make the monthly payment.

No — there is not a limitation based upon which school you attend.

Yes — it is never a good idea to max out your credit card, even if the credit limit is very low. As a general rule, never use more than 10%-20% of the credit limit. You can make payments before the statement date to help keep your statement balance low.

You should work hard to make sure you make payments on time every month. A missed payment will lead to a late fee. It could also lead to interest accruing on the balance and ultimately a negative mark on your credit report.

When you graduate from college and get a job, you should (if you used your card wisely) have a good credit score. At that time, you will have plenty of options available to you.

Brynne Conroy
Brynne Conroy |

Brynne Conroy is a writer at MagnifyMoney. You can email Brynne at brynne@magnifymoney.com

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Wells Fargo Student Credit Card Review: 3% Cash Back

The editorial content on this page is not provided by any financial institution and has not been reviewed, approved or otherwise endorsed by any of these entities.

Wells Fargo has a student credit card — but applying online is only available to people who already have an existing relationship (a checking account) with the bank. The card has no annual fee, which we like a lot. If you pay your monthly cellphone bill with the card, you get free cellphone protection insurance, with generous coverage up to $600 per incident (subject to a $25 deductible and limited to $1,200 per year). There is a decent cash back intro bonus — you can earn 3% on gas, grocery, and drugstore spending for the first six months. However, the rest of the card leaves us underwhelmed. A steep 3% foreign transaction fee makes traveling abroad more costly than it needs to be. A flat 1% cash back rate is very low. And with interest rates up to 21.90% this is not a cheap way to borrow.

Wells Fargo Cash Back College℠ Card

Wells Fargo Cash Back College℠ Card

Annual fee
$0 For First Year
$0 Ongoing
Cashback Rate
up to 3%
APR
11.90%-21.90%

Variable

Credit required
fair-credit
Fair Credit
  • Build Credit history while you are in college
  • Earn 3% cash back on gas, grocery and drugstore net purchases (purchases minus returns/credits) for 6 months and 1% cash back on all other net purchases.
  • Earn unlimited cash rewards with no complicated calculations, no minimum purchase requirements and no expiration dates.
  • Flexible rewards redemption options. Cash rewards are redeemed in $25 increments and you can choose to have them automatically deposited into your Wells Fargo savings account or apply rewards as a credit to a qualifying Wells Fargo product. Request a paper check or redeem in $20 increments at a Wells Fargo ATM with a Wells Fargo Debit or ATM card. Redeem rewards for travel, gift cards, and more
  • Extra cash rewards earning potential and deals at your favorite stores when you shop the Earn More Mall®
  • Free access to Wells Fargo Online® credit education and tools


How the Card Works

In order to apply online, you need to be an existing Wells Fargo customer — which means you should have a checking account. (Note: If you have a Wells Fargo student checking account, you could probably get a much better deal somewhere else, especially from internet-only banks — you can find our list of the Best Online Checking Accounts here — which pay much higher interest rates and charge much lower fees than Wells Fargo.)

You can still apply for the Wells Fargo student card if you don’t have a checking account with them, but you will need to go to a branch in person to apply for the card. Just be prepared for them to try to sell you a checking account while you’re there.

The credit card is fairly straightforward. It has no annual fee, and it offers a mediocre cash back rewards program. During the first six months, you will earn 3% cash back for all gas, grocery, and drugstore purchases. There is no limit to the bonus. However, you only earn the bonus cash back at merchants which are coded as gas stations, drugstores, or grocery stores. If you buy your gas at Costco or your groceries at Wal-Mart, you will not get the bonus — because these “big box” retailers do not have that merchant code.

With all other purchases, you will earn 1% cash back. After the six-month intro period, all of your purchases will get you 1% cash back.

Our favorite feature is the free cellphone insurance. If you pay your monthly cellular telephone bill with your Wells Fargo credit card, you will get up to $600 of protection (with a $25 deductible). This is great coverage for damage or theft of your cellphone, and you can make a claim up to two times each year. Just remember that this does not cover lost phones. This is a great, free way to protect your phone and avoid the financial pain of replacing or buying a new phone after an accident.

Like most student credit cards, Wells Fargo’s is a very expensive way to borrow. In fairness, Wells Fargo does offer a range of APRs (from 11.90% to 21.90%). However, given that most college student will have no or limited credit history, they can expect to pay much closer to 21.90%.

And if you are looking to study abroad or backpack across Europe, your Wells Fargo card is an expensive way to do it. With a 3% foreign transaction fee, the costs of using your card abroad could add up quickly.

How to Qualify for the Card

This card is for college students. However, you will need to have sufficient income to pay your bill each month — so be prepared during the application process to be asked about where you study and how much you make from campus (or other) jobs. Because this card is targeting college students, you are not expected to have a long history of credit, a great score, or high income.

However, if you have already defaulted or missed payments on other accounts, you will likely find it difficult to get approved at Wells Fargo. This card is targeting people who are new to credit, not people with bad credit histories. And if you don’t have any income (or just an allowance from your parents), you will also find it difficult to be approved.

What We Like About the Card

Although this is a relatively simple credit card, there are two standout features to the card.

No annual fee.

We strongly believe that building your credit while in college should be free. Fortunately, this card charges no annual fee — making the card a safe choice. So long as you pay your statement balance in full and on time every month (avoiding interest charges), the card can be completely free.

Free cellular phone coverage.

This feature is unique — and a great asset for college students. So long as you make your monthly cellphone payment with your Wells Fargo credit card, you will get free cellphone coverage. You can get up to $600 (with a $25 deductible) if your cellphone is stolen or damaged. You can make up to two claims per year, for up to $1,200. We know that every college student has a phone — and wants to avoid the steep expense of fixing a broken phone or replacing a stolen phone. This insurance policy is a great feature.

Rewards (Kind Of)

You have the opportunity to earn cash back. We don’t think you should select a credit card based upon cash back — and Wells Fargo does not pay the best cash back rate on the market. But it is still a nice bonus to have.

What We Don’t Like About the Card

You have to be a Wells Fargo customer to apply online.

If you do not have a checking account, you will need to go to a Wells Fargo branch, where they will likely try to sell you a checking account. Because of this feature, Wells Fargo is really limiting the card to their existing customers.

Very high interest rates.

Credit cards come with high interest rates. Wells Fargo is not alone (in fact, the low end of its APR range is actually better than a lot of the competition). However, the rates are still double-digit. And if you end up going into debt, interest expenses will be high.

“Gotcha” fees are very high.

If you miss a payment, expect to pay up to $37. If you travel overseas, you will be hit with a 3% foreign transaction fee. And cash advance fees are equally painful. If you make a purchase in the U.S. (and pay it off in full and on time), you will get a good deal. Any other purchase or mistake will cost you dearly.

Alternatives to the Card

Wells Fargo offers a decent student credit card. But it does not offer the best cash back rewards, and it charges a steep foreign transaction fee. Here are some other options.

If You Want to Earn More Rewards

If you want to earn more cash back, Discover is our favorite option. Discover it® for Students does not charge an annual fee and also provides free access to your FICO score. And it does something we really like: it offers a “Good Grades Reward.” You will get $20 cash back each school year your GPA is 3.0 or higher for up to the next 5 years. That is on top of a cash back rewards program that pays 5% cash back in rotating categories each quarter like Amazon.com, restaurants, ground transportation and more, up to the quarterly maximum each time you activate. Plus, unlimited 1% cash back on all other purchases. And you can get a dollar-for-dollar match of all the cash back you’ve earned at the end of your first year, automatically.

If You Want to Travel Abroad

If you want to travel abroad, you should find a Visa or MasterCard option that does not charge a foreign transaction fee or annual fee. Capital One does just that with its Journey Student credit card. In addition to no annual fee and no foreign transaction fees, you can earn up to 1.25% cash back. You earn 1% when you spend, and another 0.25% if you make your payment on time.

Bottom Line: Who Benefits Most from the Card

If you are a college student and existing Wells Fargo checking account customer, this could be a good option. By charging no annual fee, it is cheap and easy to build your score. And with the cellphone benefit on top, you can get some great value. If your goal is to earn rewards or travel abroad, there are better options out there.

FAQs

Yes, you will need to demonstrate that you have income in order to qualify for the credit card. The credit card company needs to know that you will be able to make the monthly payment.

No — there is not a limitation based upon which school you attend.

Yes — it is never a good idea to max out your credit card, even if the credit limit is very low. As a general rule, never use more than 10%-20% of the credit limit. You can make payments before the statement date to help keep your statement balance low.

You should work hard to make sure you make payments on time every month. A missed payment will lead to a late fee. It could also lead to interest accruing on the balance and ultimately a negative mark on your credit report.

No, you do not need to be an existing Wells Fargo customer. However, only existing Wells Fargo customers can apply online. Otherwise, you will need to go to a branch to apply.

Brynne Conroy
Brynne Conroy |

Brynne Conroy is a writer at MagnifyMoney. You can email Brynne at brynne@magnifymoney.com

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College Students and Recent Grads, Reviews

Review: Citi ThankYou Preferred Card for College Students

The editorial content on this page is not provided by any financial institution and has not been reviewed, approved or otherwise endorsed by any of these entities.

Citi ThankYou Preferred Card for College Students is a decent credit card that can help you build your credit history and earn rewards without having to pay an annual fee. It has a nice bonus offer (2,500 points after spending $500 in the first three months) and has a decent ongoing rewards proposition (2 points on restaurant and entertainment purchases, with 1 point on everything else). Unfortunately, ThankYou points don’t have great redemption value, and Citi charges a 3% foreign transaction fee when you use the card overseas. And with a high APR range of 14.99%-24.99%, you would want to avoid borrowing on this card.

Citi ThankYou® Preferred Card for College Students

APPLY NOW Secured

on Citibank’s secure website

Citi ThankYou® Preferred Card for College Students

Annual fee
$0 For First Year
$0 Ongoing
Cashback Rate
2 points per dollar
APR
14.99%-24.99%

Variable

Credit required
good-credit
Good Credit
  • Earn 2,500 bonus ThankYou® Points after spending $500 within the first 3 months of cardmembership.
  • 2 ThankYou® Points per dollar spent on purchases for dining at restaurants and entertainment.
  • 1 ThankYou® Point on other purchases.
  • Points earned with this card do not expire and there is no limit to the amount of points you can earn.
  • Travel with ease and enjoy global acceptance with Chip Technology
  • No annual fee*

How the Card Works

This credit card charges no annual fee and reports to all three credit reporting agencies. If you handle the card responsibly, you should be able to build your credit history while in school and have a good credit score by the time you graduate. We recommend using the credit card every month, but never spending more than 10%-20% of the credit limit. Make sure you pay your statement balance in full and on time every month — and you will see your score improve over time.

The card comes with an intro offer. You will be charged 0% interest on purchases for the first seven months, and there is no retroactive interest penalty (this is not deferred interest). If you were already planning on making a big purchase, the 0% interest rate can help you minimize or reduce the cost of borrowing. However, you should be careful. Sometimes a 0% purchase rate can encourage people to spend more than they should — and you don’t want this to be a temptation to go into debt. After the intro offer, the interest rate increases dramatically, to a high double-digit rate. Student cards are great ways to build your credit, but they are terrible ways to borrow money.

With this card, you have the chance to earn ThankYou points from Citibank. With ThankYou, you can turn your points into gift cards or cash, or even use the points to book travel. ThankYou points are not particularly valuable. Here are a few examples of how ThankYou points can be redeemed:

  • For cash back: 100 points = $0.50, minimum redemption is 10,000 ($50) or 20,000 ($100).
  • For a statement credit: 100 points = $0.50, minimum redemption is 2,000 points ($10).
  • For gift cards: you can get up to 100 points = $1 (although it can vary by gift card), minimum redemption is 2,500 points ($25).
  • You can transfer your points to airline and hotel partners. However, as a college student, you might not have a lot of frequent flier miles, making this option a waste.

You can earn 2,500 ThankYou points if you spend $500 within the first three months of opening the card. In addition, you will earn 2 points on purchases for dining at restaurants and 1 ThankYou point on all other purchases. If you use those points for cash, you are only getting 0.5% on your everyday purchases — a pretty lousy deal. You can do much better elsewhere.

How to Qualify for the Card

Citi is targeting students with this card, which means they do not expect you to have excellent (or any) credit. However, they do expect that you will have a job and income. You need to be able to prove that you can afford to make your monthly payment on time, and a parental allowance is not sufficient.

Citi will likely approve people with a thin or no credit history. However, if you already have negative items on your credit report — like missed payments or unpaid medical or mobile phone bills — it could be harder to get approved. If that is the case, you might need to start your credit-building journey with a secured credit card.

What We Like About the Card

No annual fee.

Students should not have to pay a fee to build their credit score. Fortunately, with Citi there is no annual fee. And so long as you pay your statement balance in full and on time every month, you will never pay any interest either.

A nice ThankYou bonus offer.

You can earn 2,500 bonus points when you spend $500 within the first three months of opening the card. If you turn that into cash, it would be worth $12.50. With some gift cards, you could get up to $25 of value. That is not terribly exciting — but it is still free money.

What We Don’t Like About the Card

The ongoing rewards proposition is weak.

For most college students, cash is king — and earning cash back is a nice benefit of a credit card. Cards from competitors can earn from 1.25% up to 5% cash back (in some categories). If you use your ThankYou points for cash, you will only get 50 cents for every 100 points earned. Plus, cash back can only be redeemed in increments of $50.

There is a foreign exchange fee.

If you plan on studying abroad, a credit card is very useful. Unfortunately Citi will charge you 3% every time you use your card abroad — making this the wrong card for international travel.

The interest rate is high.

After the intro period is over, you will be stuck with a high, double-digit rate. Unfortunately that is the case with most student credit cards — so you would be very wise to avoid credit card debt completely.

Alternatives to the Card

We like that the Citi card has no annual fee. However, if you want rewards or a card for overseas travel, there are much better options out there. Here are two of our favorites.

If You Want to Earn More Rewards

If you want to earn more cash back, Discover is the best option. The Discover it card for students does not charge an annual fee and also provides free access to your FICO score. But it does something we really like: It offers a $20 cash back bonus every year (for up to five years) for good grades. If you get a 3.0 GPA or higher, you will get a $20 bonus. That is on top of a cash back rewards program where you can earn 5% cash back in rotating categories each quarter like Amazon.com, restaurants, ground transportation and more, up to the quarterly maximum each time you activate. Plus, unlimited 1% cash back on all other purchases. And you can get a dollar-for-dollar match of all the cash back you’ve earned at the end of your first year, automatically.

If You Want to Travel Abroad

If you want to travel abroad, you should find a Visa or MasterCard option that does not charge a foreign transaction fee or annual fee. Capital One does just that with its Journey Student credit card. In addition to no annual fee and no foreign transaction fees, you can earn up to 1.25% cash back. You earn 1% when you spend, and another 0.25% if you make your payment on time.

Bottom Line: Who Benefits Most from the Card

If all you care about is building credit, and all of your spending is in the U.S., this is a good card. With no annual fee, Citi reports to all three credit bureaus — which should help you build your score quickly. However, if you want to earn rewards or travel overseas, you can find better deals elsewhere.

Student Credit Cards: FAQs

A student card is a credit card specially designed by a lender to get college students started with credit. The major difference between a student credit card and a regular credit card is that the student card will likely have a higher interest rate. Regular cards tend to average about 15% annual interest. In a recent MagnifyMoney study, we found the average student credit card carries an interest rate of 21.4%.

Your goal with your student credit card is to build your credit so that by the time you graduate, you have a healthy credit score in the high 600s to mid 700s. That way, when you graduate, you’ll be in a great position to make larger purchases like a new car or your first home. At that point you may actually want to earn rewards, and you’ll qualify for the best cards because you have a great score.

You should really only get a credit card if you want to build your credit score, not because you need extra money to make ends meet. If you can’t afford your monthly expenses as it is, a credit card might only make things worse.

The easiest strategy is this: Set up one recurring bill (like your Netflix or Spotify account) on your card. And pay it off in full each month. Follow that advice while you’re in school and you will absolutely graduate with a great credit score.

You can still build up your credit without having to open a card on your own. Ask you parents if you can become an authorized user on their account. All of their good credit behavior will be reported on your credit report as well. Also, consider opening a secured credit card. It’s a tool that’s meant precisely to help build credit but doesn’t have the same risks as a regular credit card. Read more about secured cards here.

Lindsay VanSomeren
Lindsay VanSomeren |

Lindsay VanSomeren is a writer at MagnifyMoney. You can email Lindsay here

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