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.
On Citibank’s Website
- Annual fee
- up to 2 points per dollar spent
- 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*
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.
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.
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.
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.
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.
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.
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.