Citi Student Credit Card

Q: For 2013 are the student cards offered by Citi any good? And what are the requirements to get approved?

A: Citibank offers some decent deals for college students. Even though I advertise their cards, I’m still going to tell you about the good, bad and ugly behind them (as I do with all the credit card reviews I write).

March 20, 2014 update: the Citi Forward Student Card is no longer available. The content below is for reference purposes only.

Unfortunately I’m no longer a big fan of the Citi student credit cards. Why? Because they recently scaled back the rewards program big time.

Previously, their Forward card gave 5 points per dollar on restaurants, books, movies, and music.

But not anymore…

Now it only gives 1 point per dollar on all purchases. The 5x point categories have been axed, so now you only earn 1 point per dollar with those, too.

And these are Citi ThankYou points. If you redeem these points for cash back, you might get as little as 1/2 penny per point. So that’s like earning only 1/2% on your purchases if you go the cash back route.

This is why I prefer the student card from Discover instead. Discover is now accepted at over 90% of places that take Visa/MasterCard, so it’s a really compelling program they offer.

The good thing is that the Forward doesn’t come with an annual fee. Aside from that, it’s pretty similar to others in the college category. You can compare others here.

Annual fee – I’ve never known Citi to issue a student credit card that had an annual fee. Of course there is a chance that may change down the road (after writing this) but I highly doubt that. They didn’t even charge annual fees on these cards during the Great Recession so I can’t imagine they would start now. That being said, on their marketing they have an asterisk (*) where it says $0* annual fee, so that may be cause for concern. Normally when there’s an asterisk next to something, we all know it means there might be a catch.

Approval – If you are just starting out in the credit world and have limited history (or no history at all) the good news is that student cards in general are much easier to get approved for than normal ones. The bad news is that according to the approval percentages I see on this website, the percentage of applicants who click on Citi’s applications and get approved is much smaller than what I see for Discover’s version. So judging by that, the approval process might be slightly more difficult. (But in defense of Citi, that might not be the reason. It’s possible a lot of people might just change their mind after looking over the application, and hence, why the approval rate is so low).

What are their requirements?

At the top of the card’s application it says:

  • You need be a college or graduate student
  • You need to be at least 18 years old
  • You need to have a valid Social Security number

The credit card reform that went into effect back in 2010 also adds a couple stipulations to getting a student card. The reform says that applicants under 21 must either have a cosigner – or – or have sufficient income themselves.

But what exactly is “sufficient income” anyway? Well the rule is vague. It says “the ability to make the required minimum periodic payments on the proposed extension of credit.” It’s up to the card issuer to determine what qualifies.

Still confused what qualifies? So am I and most others – most banks don’t disclose that information. Reportedly there are major issuers out there that have publicly stated the “sufficient income” amount starts at just $2,000 per year. Since most banks allow things like parental contributions and scholarships to be included in that amount, the sad reality is that the reform has had little effect on the student credit card industry.

It seems just as easy to get one as before, but that’s not necessarily a good thing considering that not every student knows how to manage their money responsibly. Regarding Citi’s requirements on student credit cards, unfortunately I don’t have access to any specifics about their approval guidelines. The best I can provide you are my guesses mentioned above.

3 tips for using your new student Citi card (or any other for that matter)

Here are three things you will definitely want to consider…

Tip #1: You don’t have to carry a balance to build great credit

One of the biggest misconceptions about credit cards is that you have to carry a balance in order to build your credit history. Guess what? That’s completely false! In fact, carrying a large balance is actually bad for your credit score. What’s reported to the credit bureaus is the amount due on your monthly bill (before payment is made). So there simply is no need to carry a balance, because your monthly charges will still be reported.

Tip #2: Using too much of your credit limit is a bad thing

Another big misconception is that using more of your credit limit is better for your credit score – this is also false. The FICO score formula takes into account what percentage of your credit limit on revolving credit accounts (a.k.a. credit cards) you use. It’s actually bad to use a high amount of your limit at any given time – it makes you look closer to maxing out. Using too much will actually hurt your credit score. For this reason it’s typically recommending that you should never use more than 20 to 25% of your credit limit at any given time. So if you get apply for a Citi college student card and are approved for a $1,000 limit, it would be best to never use more than $200 to $250 of it.

Tip #3: Understand when interest charges actually begin

Both students and adults are often surprised when they learn that if they carry a balance, they will be charged interest going back all the way to the date of the purchases. When you are sent your bill, if you pay the entire amount before the grace period is up (typically 21 to 25 days from date of statement) you won’t be charged any interest. However if you choose to carry any balance forward, you will be smacked with interest charges going back to the date of purchases (but it won’t show up until the following statement). That means even carrying a balance for 2 or 3 days past the grace period can cost you big time in interest! So make sure you pay off your balance in full every month. This doen’t just apply to Citi… all credit cards work this way.

Reviews of cards for college students

Written or last updated March 20, 2014

 
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