Released: August 01, 2006

Best credit cards for college kids

Source: By David Ellis, CNNMoney.com

Laptop, iPod, a messenger bag and yes, a credit card - all the staples of modern college life. Nowadays, owning a piece of plastic has become as much as part of the college experience as griping about the dorm food. In fact, over three-quarters of all college kids have a credit card, according to a recent study published by the student loan firm Nellie Mae.

But while many college students are tempted to sign up with the first offer that comes their way, parents and students should know their son or daughter is entitled to some pretty sweet deals even if they have not established a credit history. For starters, students should be able to qualify for a reasonable interest rate, says Curtis Arnold, founder of the online credit card rating outfit CardRatings.com.

While many cards offer introductory rates of zero percent for the first six to 12 months, students without a credit history should try to find a credit card with an annual percentage rate in the mid-teens - around 16 or 17 percent or lower, says Arnold.

“Avoid ones that get over 20 percent,” he says. “Check every avenue you can and compare what is out there.”

While both fixed rate and variable rate cards have their advantages depending on whom you talk to, securing a card with a low interest rate is important since college kids tend to carry a balance on their credit card. And a higher interest rate can only mean more money out of their pocket.

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