Is the Capital One® Journey℠ Student Rewards card a good choice?
Despite all the changes regarding student credit cards resulting from the Credit Card Act several years ago, there are still a myriad of options available in this category and choosing the best one is no easy task. Here’s an honest review of the Journey Student Rewards credit card.
What are the requirements?
Since this card is designed for college students it is much easier to qualify for than a regular consumer credit card. The requirements are:
- To apply you need to be at least 18 years of age and have a valid Social Security number.
- If you are responsible for paying rent/mortgage, then your annual income must be greater than your annual rent/mortgage payments.
- Approval is based upon satisfying Capital One’s credit standards.
- Just like every other credit card company, Capital One does not publicly disclose the credit score requirements for a given card. So if you want that info, you’re not going to find it.
However, because this card is geared towards students with no credit history or very limited credit history, if you meet their basic qualifications then it’s worth giving the application a try.
What are the rewards?
The funny thing is that I hear from people of all ages who want to apply for the Journey card . Why do they want it so bad? Because the rewards program is a ridiculously good deal…
- You get a full 1% cash back on all purchases.
- Plus when you pay your bill on time, you get a 25% bonus on the cash back you earn each month.
- There is no limit to how much you can earn.
When combined, it’s a total of 1.25% cash back on everything you buy! That is actually better than what most non-student cards will pay, so it’s quite generous. As long as your account is open and within good standing, you won’t lose your rewards because they never expire.
Best of all, redeeming your cash rewards is hassle-free. Here’s why:
- You can redeem them at any time. There’s no minimum amount needed for redemption.
- Redeem your cash rewards for a check, statement credit, or gift cards. You can even donate them to participating charities if you want.
What are the benefits?
Think the rewards are good? Then check out the benefits! This is where the Capital One Journey really distinguishes itself relative to other cards. Some of the benefits you won’t find elsewhere.
- Free access to your monthly credit score – Through the Journey Credit Tracker (an exclusive website for cardholders) you get free access to your TransUnion credit score each month. This score is not a FICO, but it is based on your credit file from TransUnion (which is one of the big three credit bureaus).
- Text and email alerts – To help you stay on top of your account, Capital One lets you setup text/email notifications for things like payments and balance info.
- Track/manage your credit health – As you can probably guess from its name, the Journey Credit Tracker website allows you to track your credit over time and learn about the factors which are impacting your score.
- Extended warranty program – This is an extremely valuable benefit, because it doubles the length of warranty coverage (up to a max of one additional year) on eligible items that come with a manufacturer’s warranty. For example if the original warranty was 1 year, this benefit provides 1 extra year of coverage. Items must have been paid for in full using your Capital One Journey Visa card.
- 24-hour travel assistance services – You can get an emergency card replacement or cash advance if your card is lost or stolen.
- Auto rental collision damage waiver – This is provided on eligible rentals which are paid for with the card. It covers damage due to collision or theft. This is secondary coverage, so it’s supplemental to any other forms of auto insurance you may have.
- $100,000 in worldwide travel accident insurance – You get automatic coverage at no additional cost when you use your Journey credit card to purchase your ticket. It provides up to $100k of coverage in the event of death or dismemberment during qualifying Common Carrier travel.
- $0 fraud liability – Now this one isn’t a special benefit because practically every credit card offers it. However I just want to mention it in this review if you are new to credit cards… so you can rest assured knowing that you won’t be held responsible for fraud, if lost or stolen.
What’s the interest rate?
Both purchases and balance transfers have a variable APR of 19.8%. Meanwhile, cash advances have a variable APR of 24.9%. These are relatively high interest rates compared to non-student cards, but that’s to be expected on a student card since there is not much credit history to base your risk on. To avoid paying interest charges, make sure you pay off your statement balance in full before the due date. When you do that consistently you take the whole interest rate thing out of the picture.
With no annual fee and the ability to earn 1.25% in cash rewards, the Journey from Capital One is arguably the best student credit card on the market.
The pros and cons of student cards
A lot of people don’t like the idea of students and young adults having credit cards. But these critics miss the most important reason for having them… building a credit history. Credit cards are a bad idea if you’re going to use them irresponsibly to rack up debt that you can’t pay off while in school. However, if you manage them responsibly (such as paying your bill in full and on-time) they are a great way to build your credit. And, the sooner in life you begin doing this the better.
And why is that important? Well for starters, your creditworthiness can affect more than you might think. In some states, your credit score is factored into your auto insurance premiums (a bad score might cost you more). Also for some jobs in some states, an employer might consider your credit history during the hiring process.
Then of course there are loans. Having better credit will help you qualify for better rates on everything from car to student loans. And when you’re ready to buy your first home, the same holds true for mortgages.
Conclusion? Credit cards can be a double edged sword. As with anything in life, they can be either good or bad thing depending on how you use them. So use them the good way… pay your bill in full and on time each month. Earn rewards and build your credit in the process!