While you are young there are several items you should set in motion to ease your stress later in life. One thing that should be on the top of your list is improving your credit score early. The easiest way to do this is by getting a credit card (like the BankAmericard Credit Card for Students) and using it often to start establishing credit. Hundreds of different credit cards exist, and trying to choose the right one for you can be a daunting task. If you are still a student one card that you should consider is the BankAmericard student credit card. Let’s review what makes this card a good starter credit card for students.
Low Introductory Interest Rates
One of the first reasons that makes the BankAmericard credit card for students enticing is its offer of 0% introductory APRs on both new purchases and balance transfers for the first 15 months your account is open. To break this down simply, this means that if you make the minimum required payments no interest will accumulate during the first 15 months you use this credit card. This isn’t exactly 15 months of free money; if you don’t pay at least the minimum payment then your 0% APR will most likely be canceled and you will have to pay interest on what you owe. So it doesn’t provide the ability to forget payments completely, but it does provide forgiveness and flexibility that could be good for new credit card users who are afraid of high interest rates. It’s also good to remember that repeatedly using up all your credit will have a negative impact on your credit score, and after the 15 month clock runs out you will be charged interest on any remaining balance.
No Existing Credit History Needed
No credit history is required when applying for the BankAmericard credit card if you are an active student, which means this is ideal for students who have no credit history and want to start building a good credit score. According to Experian, one company who publishes credit reports, it takes up to six months to establish any sort of credit. The more you use your credit card (which may be very little for students) the faster your credit builds, as your credit ‘file’ becomes thicker and you build good repertoire with the credit agencies. Getting a car loan or buying a house using a mortgage increases this rate, though these loans are often impossible to get without significant collateral or a good credit history. This is why it is so important to start early, use your credit card often, and pay on time to start establishing your credit history now. Student loans are a type of loan that also works well with establishing credit, so it is very possible to end your student years with a great credit score close to 800. Starting out life in or near this often elusive ‘800 club’ will give you an advantage in competing for loans and home mortgages. If you have a business learning to read an equifax business credit report can come in handy too.
No Annual Fee Required
As students, the last thing we want is more monthly/annual fees to slowly suck our bank account dry. Luckily the BankAmericard student credit card has no annual fee. According to NerdWallet, in 2015 the average annual credit card fee was $58, though this includes credit cards with large reward programs that may justify a large annual fee. So a $0 annual fee is perfect for students and significantly below the average annual fee. Though as you may guess this comes at a trade off because this credit card offers no rewards. They offer a 0% introductory APR and no annual fee, which may be enticing to some people, but depending on your spending habits this may not be the best credit card for you. It’s great to establish credit, but if you are looking to get rewarded for your spending, then it would be wise to look at other credit card options.
No Balance Transfer Fee for the 1st 60 Days
One often highlighted feature of this credit card is that it offers a $0 balance transfer fee for 60 days (if you couldn’t tell yet there are many “0’s” associated with this card, targeting characteristically broke students). This means that for the first 60 days you can transfer any balance from any other credit card to this card. This is great because it helps you consolidate any debt that you may have on other credit cards, and reduces the hassle of paying multiple monthly credit card bills. Additionally, depending on the APR rate of your past credit card, this could reduce the amount of interest you have to pay.
Get Free Access to Your FICO Score
Lastly the BankAmericard credit card for students offers free access to your FICO credit score within the mobile app. You can monitor your credit score, watch it grow, and see how different factors influence it. This is probably one of the best ways to learn about credit. You can study how it works until you are blue in the face, but until you see an actual score responding to real life factors it can be hard to comprehend the scale of it all. Bank of America also offers free access to credit education on a variety of topics like how to keep your credit healthy, how to use credit cards responsibly, and how to establish and live within a budget. So if you’re looking for tuition free information on a variety of topics, look no further than the credit card in your wallet. Mobile banking, paperless statement options, and text banking are all included at no extra cost as well.
Start Building Your Credit History Now (Before It’s Too Late)
So if you feel like you fit the right criteria for this credit card — you want a super affordable credit card that you can use to start establishing credit, and you think that making minimum payments is something that you will do often– then flip the switch and sign up. It is important to remember though, that if you plan on paying in full every month, then the 0% APR rate should not be your main focus, rewards should be your main focus. Bank of America offers other credit cards with different rewards and perks. Identify your personal needs and plans and then choose a credit card that best line up with these needs. But don’t let this obstacle of choosing the right card for you stop you from starting on your credit journey. Used smartly, credit cards are a great tool that allow you to be rewarded for things you already do. They can lead to many great rewards (see credit card flipping for an example of how to maximize possible benefits from credit cards).