Most student cards on the market are a rotten deal. I’m not denying the fact that the 18-24 age range is a riskier group for the banks – but still – that’s not an excuse for the excessive APRs and crappy benefits!

I had a BofA credit card at age 19. It wasn’t a student card but might as well have been, because it was a very basic account with almost no benefits.

Here’s a review of the current Bank of America student credit card. It has some advantages but also major disadvantages you need to know about.

Advantages?

Reasonable Interest Rate – Without a doubt this is the best thing it has going for it. Most cards in this category have APRs as high as 20% or more. However as of May 2012, BofA gives everyone the same rate:

It would still be stupid to carry a balance at that rate, but at least it’s somewhat reasonable (in comparison). Also there’s no penalty rate… in other words if you make a late payment, you don’t have to worry about them using that as an excuse to raise your interest rate.

No Annual Fee – Not really surprising though, as most student cards don’t charge a fee.

Account Management Features – Aside from the obvious things you would expect, there are a few unique features: the ability to text and get account information in seconds, as well as optional email/text alerts for balances and payment due dates.

Student Identity Theft Protection – The account offers this for 4 years with no charge. But what is it exactly? I had to dig in the application’s fine print to find out:

• Enrollment/activation is necessary to get the benefits (but there’s no charge to do that).
• Each business day your credit file is reviewed for signs of identity theft/fraudulent activity. Whenever “certain changes occur” they will notify you (but they don’t disclose what specific changes trigger that).
• If you’re a victim you can call and get advice, but you will be the one responsible for actually resolving the issues (such as contacting the credit bureaus, filing disputes, etc).

Other Benefits (Fluff) – When I looked at the BofA student card application there were several other benefits listed but they were basically just fluff. Don’t be fooled that it’s a “Platinum Plus” Visa as that doesn’t really mean anything nowadays (in fact, it’s the same level my BofA Visa also started out at when I was 19).

Examples of fluff? They listed 4 different benefits related to fraud liability and protection but at the end of the day those aren’t anything special because by federal law, you’re protected against fraud on all credit cards. If there are unauthorized purchases made, the most you can be held liable for is (a) a max of $50 if someone used your physical card to make the purchases, or (b) $0 liability if only your account number was used while the card was still in your possession. That goes for all credit cards, not just this one.

Disadvantages?

No rewards program – This is a major letdown and one of my biggest complaints about student credit cards… so many of ‘em don’t give you rewards!

Why not? I guess they think you don’t deserve them. Well, I say that’s BS! Whether you are 18 or 80, everyone should be getting something back. Credit card companies make 1-2% on your purchases (paid by the stores/merchants) so it’s only fair that they chuck back some of that to you, right?

If you want cash back or points, compare these student credit cards with rewards.

Few Useful Benefits – Aside from rewards, one of the main reasons (in my opinion) to have a credit card is so you can take advantage of the benefits it offers. With many other student cards, on qualifying purchases you can get a free extended warranty and 90 day protection against theft/accidental damage. Unfortunately you won’t get any of those with this bare-boned Bank of America Student Visa.

Contrast that to one of my favorite no annual fee offers, the Citi Forward card for college students. Yes, I do choose to advertise it and after you see all the benefits that come with it, you will understand why!

BofA Customer Support – Now in their defense, I have noticed their credit card customer support has improved lately. But still, it doesn’t exactly have the best reputation (to put it nicely). Probably the best student card for this category is from Discover. Did you know that all of Discover’s customer service reps are in the US? A rarity for a credit card, that’s for sure!

Verdict?

Overall, the Bank of America student card is an alright choice for building a credit history and score. But aside from the ID theft protection, the lack or rewards and useful benefits means all you are getting is plain vanilla credit card.

Be warned that even though the APR is below-average, it still doesn’t make any sense to carry a balance on. Simply put, all student credit cards (including this one) will have APRs higher than any student loan will charge. So if you need money for tuition and expenses, do NOT use a credit card as your source!

And on that note, If you think you will be prone to getting in trouble by using credit, then it will probably be best for you to avoid it altogether (at least for now). Here are some alternatives to using the Bank of America student credit card:

American Express Prepaid – You can only spend what you load onto the card, meaning zero debt! Getting the card is free.
Secured Credit Cards –With these types of cards your credit limit is back by your security deposit. Annual fees tend to be around $30-50 per year.

Let’s be honest… in the business world, portraying the right image means everything.

Think about it… what goes thru your client’s mind if you whip out a sub-prime card for bad credit to pay for a dinner?

The client is probably thinking “How can I trust him with my money, when he obviously can’t even manage his own!”

Obviously, you won’t have to worry about that problem when paying with the American Express Platinum Business card. No other card shouts success like this card.

*Note: If you’re looking for the personal (non-business) version then go here.

But is it just a status symbol?

The truth of the matter is that this card is far more than a status symbol. If you actually use the benefits, it’s an excellent investment which can easily save you thousands of dollars per year. But is it right for you? Review these 10 benefits (and drawbacks) and decide for yourself.

1. It’s a charge card, not a credit card

First of all, it’s important to realize that this an American Express charge card (not a credit card). That means you have to pay your bill in full each month. So this is the wrong choice if you need long-term financing.

If you’re looking for a business credit card that lets you carry a balance, then I would recommend the Chase Ink Cash.

2. Get free access at 600+ airport lounges

If you do a decent amount of traveling, then you will especially enjoy this benefit. Only the AmEx Business Platinum offers you access at all of the following:

• Free Priority Pass Select membership – With this you get access to all of their lounges, both domestic and int’l. Access for you is always free. If you wish to bring guests, they are $27 per person for each visit. You can’t buy the “Select” Membership directly thru Priority Pass, but look how much it would cost to buy their most similar plan:
  

Plus on top of that, you also get free access to the first-class lounges for the following airlines:

• Delta Sky Club
• American Airlines Admirals Club
• US Airways Club

Just a Delta Sky Club membership alone would cost you $450 per year! So as you can see, between the Priority Pass Select and the airline lounges, the value you’re getting from airport lounge access is literally worth up to $1,000+ per year.

3. Get $450+ in perks with each hotel stay

Without a doubt, one of the most popular benefits on the business Platinum card is the Fine Hotels & Resorts program. There are over 700 hotels worldwide that participate and when you stay with them, you will get the following:

• Room upgrade upon arrival, when available
• Noon early check-in, upon availability
• Daily continental breakfast for two
• 4:00 pm guaranteed late check-out
• Additional hotel-specific benefits, such as a $100 dining credit or free 3rd night (the benefit will vary by property)

So if you’re a business traveler who stays at more of the higher-end hotels like Hyatt, Mandarin Oriental, the Ritz, etc. this benefit alone is reason enough to apply. However if you’re more of the Motel 6 type of guy, the drawback is that this benefit won’t be of any use to you.

4. Up to $200 in airline fees refunded every year

Not too long ago American Express added a new benefit to their Business Platinum Card and that is the ability to get up to $200 in airline incidental fees refunded every year; checked baggage fees, in-flight meals, ticket change fees, in-flight entertainment charges, etc.

The only drawback is that you have to pick one airline for this. For example if you choose United, then you will only get these fees refunded when flying with United. But don’t worry, you have the option each year to change your preferred airline.

5. Membership Rewards

Only the American Express Business Platinum & Centurion cards participate in the Membership Rewards First (which is much more valuable than regular Membership Rewards on the Green and Gold). Here’s what you get:

• 1x point per dollar spent on purchases
• 2x points per dollar spent with AmEx Travel
• Up to 10x points per dollar at over 300 websites thru Membership Rewards
• There’s no limit to how many points you can earn and they never expire
• Don’t have enough points for the reward you want? You can get up to 60,000 points advanced to your account.
• Want travel rewards? Only Membership Rewards lets you convert your points to frequent flyer miles and hotel rewards, usually on a 1:1 basis, with 15+ airlines and hotel programs participating.
• You can also score up to 25,000 pts using this link.

6. Concierge service

I know there are a number of credit cards nowadays that come with concierge service (i.e. Visa Signature and World MasterCard) and what they offer is good considering that you can get it on a no annual fee card like the Sapphire from Chase.

However the 24/7 concierge we’re talking about here is of a whole other caliber. It’s the cream of the crop from American Express and they will really jump thru hoops for you.

7. Up to $200 in free roadside assistance

Don’t have an AAA membership? No worries, because with card you get free roadside assistance; up to $50 per call and you can use it up to 4x per year (so up to a $200 value).

8. Reimbursement for $100 Global Entry fee

If you’re not familiar with Global Entry, it’s a program administered thru the U.S. government which allows approved low-risk travelers expedited clearance when going thru US customs at most major airports.

If approved, you have the ability to skip the lines and use an automated kiosk to check yourself in when you’re returning to the US.

To apply for this, you have to cough up $100. However if you pay with your Platinum Business Card from Amex, you will receive a statement credit to offset the cost.

9. A large number of insurance benefits

You probably won’t be surprised to hear about the many insurance benefits which are included with your card membership on eligible purchases:

• Purchase Protection – Covers accidental damage, theft or loss on qualifying new purchases for 90 days. Up to $10,000 per incident with a max of $50,000 per year.
• Extended Warranty – Receive up to 1 additional year in coverage on qualifying purchases which come with a US manufacturer’s warranty. For example if it comes with 1 year of coverage, you get an extra 1 year (2 years total) thru American Express. Up to $10,000 per item, not to exceed $50,000 per year.
• Car Rental Loss & Damage Insurance – Please note that on AmEx Business cards you don’t get this benefit when renting outside the US.
• Baggage Insurance Plan – Offers extra coverage during qualifying Common Carrier travel which is purchased with your card.
• Travel Accident Insurance – During qualifying Common Carrier travel.

There are others too, check out the application to see them.

10. Companion airfare on international flights

If you travel internationally, then even if you just use this feature once, you could easily save a thousand dollars or more with it.

• Purchase an eligible business or first-class ticket on an international flight to get the companion ticket offer
• Available on international flights with 23 airline partners
• The companion airfare is free but you will have to pay any applicable taxes, fees, and airline fuel surcharges on this 2nd ticket.

Who should apply?

At $450 per year, it’s definitely not for everyone. But as you see, even if you only use a fraction of the benefits, the membership fee can easily pay for itself many times over. So if you see yourself using these benefits, the choice is obvious – go for it. This is especially true for avid travelers.

Best Offer: Apply now and earn up to 25,000 bonus points

For those who won’t be using the benefits, then it will probably make sense to consider a different business credit card. The same holds true if you anticipate the need to carry a balance. For good alternatives you can compare business card offers here.

According to the website Amplicate, which measures social media, “currently more than 97% of people hate Sallie Mae.” Ouch!

But whether you love ‘em or hate ‘em there is one thing I think everyone can agree on… their credit card rewards are a surprisingly good deal!

Two hidden gems for cash back

Not many people know about the Sallie Mae Visa. Why not? Well for starters, when I tried to find it myself on SallieMae.com I came up empty handed. Just to hunt down the official page I had to turn to Google. Apparently, they don’t seem to be too eager to market it.

That a pity, because both of their credit card offers can save you a lot of money. However I must warn you: during winter 2012 the Sallie Mae credit card portfolio was sold to Barclays. As a result, there’s a cloud of uncertainty which I’ll tell you about in a minute.

Offer #1: Sallie Mae Visa Signature card (2% cash back, in theory)

The rewards on this card are a beast:

Yep, that’s right… a straight up 2 points per dollar spent without any limits to how many you can earn. There must be a catch, right?

Of course there’s a catch.

This card has a rewards program which is similar to the Bank of America Worldpoints – one of the least consumer friendly reward programs on the market. Why? Well it’s a tad better than the BofA system but only by a hair. The chart on the right shows you the problem.

As you see, if you cash out your points in the lower tiers, you may only walk away with as little as 65% value. For your Sallie Mae rewards card to yield a full 2% cash back, you need to redeem at least 25,000 at a time.

Whether you’re a college student or not, that’s a high fence to jump. At 2 points/dollar it means you will have to spend $12,500 before you have enough.

Now for catch #2. Since the sellout to Barclays, this card is nowhere to be found. Here was the old link for it, which is now dead. I’ve searched the net far and wide and can find no evidence that Barclaycard is still offering this Sallie Mae Visa with 2% rewards.

Offer #2: Sallie Mae Cash Back Visa (up to 5% cash back)

Who doesn’t love 5% cash back credit cards, right? You probably already know about the Chase Freedom, Discover More, and Citi Dividend. Well, here’s another one to add onto that list.

• 1% cash back on regular spending
• 5% cash back gas and groceries, earned on the first $500 in combined monthly spending for these two categories (after that it’s 1%).
• 5% cash back on books, earned on the first $1,000 spent monthly in this category (1% after).

It’s hard to argue the gas and groceries, but the $500 monthly cap is kind of a drag. I wish they did it quarterly like the Chase Freedom and Discover More ($1,500 per quarter). The nice thing about structuring it that way is that it helps with spending fluctuations.

For example, I could spend $500 this month, $250 next month, and $750 the following month… which equals $1,500 for a quarter. But with the Sallie Mae, the strict $500 threshold resets every billing cycle, which means it’s more of a use it or lose it type program.

But regardless of how you slice it, the Blue Cash Preferred with it’s 6% rebate at grocery stores still remains king of the category.

Meanwhile the 5% on books is the bomb (I’m rehashing 90’s lingo) however my question is… what exactly do they count as a bookstore? Since a lot of people buy their textbooks and others online, will those count or not? That’s one question I would want answered. Speaking of which, you may be surprised to hear the Citi Forward’s 5x points on bookstores does include Amazon (it has for a couple years but I can’t imagine that will last forever).

What happens now?

If you want to apply for the 2% cash back Sallie Mae Visa Signature card… it’s not going to happen. I will update this review if I see them re-launch it but as of now, there’s no marketing material or application for it anywhere. As an alternative, check out these 2% reward cards to quench your thirst.

Meanwhile the Visa card with 5% cash back is still available. It’s not anywhere on Sallie Mae’s website but you can call 1-888-742-3710 for more info. The hours are quite limited: 8-8 on M-Th and 8-5 on F, all times Eastern.

Written or last updated May 2012

Disappointed with my broker, I’ve been shopping around for a new one lately. While researching Morgan Stanley, I noticed they have a couple new credit card offers out which were launched in 2012.

There is no application online and the website only provides very basic details about the two cards. For example on the first card, all they say is “Get Membership Rewards points on all eligible purchases” in regards to the rewards program… not very informative, right?

So I called up cardholder customer service to find out the nitty-gritty on both of the offers.

Morgan Stanley Credit Card from American Express

• Annual Fee: $95 but the first year is free.
• Rewards: 1 MR point per dollar spent. There are no bonus categories.
• Anniversary Bonus: For each year $25,000+ is charged to the card, an anniversary bonus of $100 is given. The year starts/stops on the date of which the account is opened.

In a nutshell this is the same as the Green Card from American Express. However it does come with one extra benefit, which is the anniversary bonus for spending $25k or more. Other than that, you’re essentially applying for a Green Card.

Morgan Stanley American Express Platinum Card

• Annual Fee: $450, this is NOT waived for the first year.
• Rewards: Same as the non co-branded Platinum Card, which gives 1x points on regular purchases, 2x thru American Express Travel Services website, and additional points through the Bonus Points Mall/Partners.
• Anniversary Bonus: For each membership year $100,000+ is spent,  a $500 bonus from Morgan Stanley is given.

In a nutshell this card is the same as the traditional Platinum, with the exception of two key differences – the anniversary bonus and an additional Platinum Card (under the same account) can be ordered for no additional charges. For everything else, you can read about the Platinum Card benefits on the traditional version for comparison.

Who should (and shouldn’t) get them?

If your brokerage account is with Morgan Stanley, then a strong case can be made for getting one of these cards if you spend enough to earn the anniversary bonus each year. It’s a pretty compelling reason when you consider that it basically will offset the cost of the annual fee on both cards. To apply for these cards, you will have to call Morgan Stanley’s customer service because there are no online versions of the application. Either of these offers beat the ol’ Morgan Stanley MasterCard, which was 1 point per dollar and flimsy when it came to benefits.

However the regular Morgan Stanley credit card (Green equivalent) I don’t think is worthwhile, even when you take into account the $100 bonus for spending $25k/year. Why? Because the AmEx Premier Rewards Gold is $80 more per year and it gives you double and triple points on categories, plus the ability to earn 15k bonus points each calendar year you spend $30k.

In short, compare spending $30k on the PR Gold Card vs. the $30k on the basic Morgan Stanley AmEx. Factor in the bonus point categories and the annual spend bonus (15k MR points is worth a lot more than $100). Despite the higher fee, you’re going to come out ahead substantially with the PR Gold.

Meanwhile going back to the co-branded Platinum, it seems to be a new tread. There is a Mercedes Benz American Express Platinum which was launched back in 2011 (though its annual fee is slightly higher). Whether you get that or the Morgan Stanley Platinum AmEx, just make sure you’re comfortable being married to the co-brand (i.e. If your next car is a BMW or you switch brokers next year, suddenly you may no longer like that aspect of the card).

Written or last updated April 2012

The Express clothing store card recently re-vamped its rewards. Is it worth a look?

Getting a clothing/retailer’s credit card rarely makes sense. There are really just three circumstances when you should apply for one:

1. You can’t get anything better, because you need to get a starter card to establish credit history.
2. The store card operates on a major payment network (like the Sams Club Discover card). That way you will be able to use the card at more than just the affiliated store.
3. The retailer’s rewards program is insanely generous and you spend enough with them to justify the hassle of getting their store-only card.

So unless you meet one or more of those qualifications, a retailer’s card just doesn’t make sense. So that brings us to the question… does the new Express Fashion credit card make the cut? Well here’s the lowdown on the new “Next” rewards program.

Express Next credit card

This is the card everyone starts out with. There’s no annual fee.

Rewards: It pays 15 points per dollar spent. That may sound like a boatload, but every 2,500 points = $10 reward. So that means each point is only worth $0.004 (less than half a penny). However that’s still a good rewards value, because it means the rebate is 6%. Also there are days each month where additional points can be earned.

Birthday: There is also a “birthday gift” but the Express store card application doesn’t tell us what that is. But I did some digging around and according to an FAQ on Quora, it’s reportedly a $10 coupon.

Coupons: Like most store cards, expect to get coupons/promotions in the mail on occasion.

Express A-List credit card

This is also called “Next” but they add “A-List” onto the name to jazz it up. If you earn 7,500+ points in a given year, then the Express A-List upgrade will happen. Since there’s 15 pts/dollar that means this happens after you spend $500. Keep in mind the year resets on the anniversary date of when you opened the account and to maintain the A-List level, you have to continue to spend that much to keep it.

Rewards: Like the other card, this one also earns 15 points per dollar. However unlike the other one, with the Express Next A-List program the points are worth more – every 2,500 points = $15 rewards (versus $10 on the regular card). So each point is worth $0.006 (50% more) and that brings the total rewards to the equivalent of 9%.

Birthday: This version also gives a birthday gift but the application says it’s a “premium” gift. What does that mean? That I couldn’t find the answer to (but if you know, feel free to chime in on the comments). My guess, based on similar store credit cards, is that the coupon is probably around 2x the base level, which would be $20 for this card. But again that’s just my best guess.

Coupons: Ditto as above.

Shipping: Orders on Express.com get free shipping with the A-List card. However keep in mind that you can often find promo codes (w/o the Express credit card) for free shipping, too.

Now for the bad things

Interest Rates: Both of the Express Fashion credit cards are issued by World Financial Network Bank (WFNNB) who are notorious for dishing out ridiculous APRs. With these cards you’re going to pay a steep 24.99% APR. But remember if you pay your bill in full and on-time every month, interest charges can be avoided.

Store-Use Only: It’s not branded with any major payment network, so the only thing this is good for is shopping at Express stores.

Credit Limit: Some reviews I’ve heard say the Express store card’s credit limit can be quite low. One guy said $200. Obviously better credit scores/history will get better limits. But if you get stuck with a low limit keep in mind how that may affect your credit to debt ratio if you don’t manage it properly.

Verdict?

Would I fill out an Express store card application just to get 15% off the first purchase? Definitely not! Using that as a reason to get a retailer’s card is a bad idea, unless maybe you’re shopping at Lowes or Home Depot where your first purchase could be thousands of dollars. Then the one-time 10-15% discount can be worth it.

However if you frequently shop at their stores, then the Express clothing credit card has one of the best programs on the market, in terms of the percentage rebate it gives. That especially holds true if the account is upgraded to the A-List level. But if you only spend a low amount there, say $500/year, it might not be worth that hassle because that would only net you $30 in rewards.

Other good options?

If you don’t spend enough at Express to warrant getting their credit card, then check out these:

• Chase Freedom – 5% on rotating categories + big signup bonus
• Citi Forward – 5x points on multiple categories
• Citi ThankYou Preferred – comes with great signup promotion