Citi Student Credit Card
Q: Are the student cards offered by Citi any good? What are the requirements?
A: Citibank offers some pretty sweet deals for college students, and I’m not just saying that because this site advertises them (we advertise most other major banks, too). Don’t believe me? Take a look at Citi’s current offer and see for yourself.
So what makes them great?
Here’s what I like best about Citi student credit cards – they offer a lot of perks and benefits:
Rewards – One thing I can’t stand about the college student card industry is that a lot of them don’t have rewards. I guess some banks think that just because you’re a student starting out, you don’t deserve cash back or points.
But Citi on the other hand DOES offer perks. In fact, as I’m writing this, there is a Citi student card that gives 5x points on restaurants, fast food, movies, music and bookstores.
No annual fees – 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.
Reasonable approval – If you are just starting out in the credit world and have limited history (or no history at all) you may very well still be approved.
Judging by the forum posters, it sounds as if Citi is lenient in the approval process to college students who are new to credit (however if you already have bad things on your credit file, that’s another story).
Compare credit cards for students from Citi and others
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. But based on feedback I have read they sound to be very reasonable and accommodating.
3 tips for using your new student Citi card
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.
