Discover Financial Services (DFS), Bank of America Corp (BAC), Capital One Financial Corp. (COF): Three Credit Cards for Your College Freshman

Page 1 of 2

Source: Nazareth College.

It’s back-to-college season, and parents are weeping (or celebrating) as their college freshmen head off to school. One of many things they’ll have to learn about as they start to navigate life on their own is how to handle their finances responsibly, and a credit card can be a great tool toward that end. Three card offerings stand out above the rest for students — and for investors, there’s one bank in a good position to use the relationships developed on college campuses to help expand its business portfolio.

Discover Financial Services (NYSE:DFS)

Should you send your student with a card?
Whether credit cards are harmful or helpful is the source of much deliberation in households across America. While cards can be overextended and harmful in a variety of circumstances, they can also help any 18-year-old when used properly.

The decision to send your child off with a credit card is largely a personal one, but if the new student treats it like a debit card rather than a source of money for which only a minimum payment has to be met each month, it can be a helpful tool. For example, cash-back rewards and benefits, in addition to being a great perk, can provide great security in the event of an emergency, educate the student about personal finance, and serve as a principal tool in building a credit score, which helps people secure loans for big-ticket items such as cars and houses.

Many companies offer fee-free cards designed for students, and, of course, if your child pays off the balance every month, no interest will accrue.

Parents should also note that the Credit Card Accountability Responsibility and Disclosure Act of 2009 now requires anyone 21 or younger to either have a co-signer or a proof of income that shows they can repay their debts.

With all that in mind, let’s look at three potential card options, all of which have no annual fee.

Discover Financial Services (NYSE:DFS) : Discover it Card‎ for Students
The Discover it Card was released at the beginning of this year to much fanfare, with a press release touting it as “game-changing.” Since it offers a wealth of benefits and currently holds a 4.8-star rating out of five from its cardholders, it’s easy to see why this is a great option for any student.

  • Rewards: 5% cash back on rolling categories every quarter and 1% cash back on all other purchases.
  • Rate: 0% for six months and then 12.99% to 21.99%.

Discover Financial Services (NYSE:DFS) ranks No. 2 in J.D. Power and Associates’ 2013 Credit Card Satisfaction Study, narrowly missing the top spot held by American Express for the past seven years. There’s also no foreign transaction fee, which is helpful for any student who may spend a semester abroad.

Bank of America Corp (NYSE:BAC) : BankAmericard for Students
While Bank of America Corp (NYSE:BAC) has had its ups and downs in recent years, the BankAmericard has remained a helpful card for any student. Its 3-2-1 cash-back feature is helpful for both road trips and late-night runs to load up on ramen noodles at the grocery store.

  • Rewards: 3% on gas purchases, 2% on groceries, and 1% on everything else.
  • Rate: 0% for 15 billing cycles and then 10.99% to 20.99%.
Page 1 of 2
blog comments powered by Disqus
Insider Monkey Headlines
Insider Monkey Small Cap Strategy
Insider Monkey Small Cap Strategy

Insider Monkey beat the market by 52 percentage points in 24 months Click to see monthly returns in table format!

Lists

10 Cities with High Demand for Nurses

6 of the Worst Greeting Card Messages Ever Crafted

6 Ways to Make Money in ArcheAge and Build Your Empire

10 Foods To Eat To Lower Cholesterol Levels

The 10 Most Hated Television Characters of All Time

The 30 Worst Halloween Costume Ideas Ever Brought to Horrible Life

10 Vocational Skills in Demand Today with Jobs Waiting to be Filled

10 Best Places to Visit in Central and South America

The 10 Greatest Empires in History Which Nearly Conquered the World

The 6 Cheapest Boarding Schools In America 2015

5 Clear Reasons LoL is Better than DotA, Continues to Rule MOBAs

The Only 9 Teams with a Chance to Win the Super Bowl

The 15 Most Common Phobias in America that Induce Fits of Panic

Top 6 Least Expensive Tourist Destinations in 2014

Jim Goetz, Peter Fenton, Jim Breyer: Top 6 Venture Investors for 2014

Top 15 Billionaires in 2014

5 Pitfalls To Avoid When Buying a Franchise

Top 20 Medical Schools in the US – 2014 Rankings

4 Business Strategies that Turned Jamie Oliver into the World’s Richest Chef

6 Qualities That Make You A Good Team Player

10 High Paying Seasonal Jobs in America this Holiday Season

The 10 Busiest Shipping Lanes in the World

5 Most Valuable Brands in China

The 10 States with Highest Substance Abuse Rates Crippling Their Populace

The Top 10 Things to Do Before You Die That Will Echo for Eternity

The 10 Best Selling Items on Etsy

Top 10 Things to Do in Tokyo, the Greatest City in the World

10 Mistakes on Social Media that Can Harm You and Will Probably Get You Canned

The 10 Best Cities to Find Jobs in 2014

The 10 Most Controversial Songs Of All Time to Hit (and get Banned from) the Airwaves

The 20 Biggest IPOs in US History

The 10 Best Places to Visit in Mexico that Are Beautiful and Safe

7 Bad Habits that Age You Beyond Your Years

The 40 Best Fortune Cookie Sayings That Will Leave You Bemused, Befuddled, or Beguiled

10 Foods to Eat Before a Workout to Make Every Drop of Sweat Count

The 5 Best Documentaries On Netflix You Must See

The Most Heartwarming and Inspirational Story Of This Halloween Season, It Will Make You Cry and Jump For Joy

10 Best Party Songs of All Time to Bring the House Down With

5 New World Order Conspiracy Theories that Will Strangle the World

The 10 Highest Rated Movies of 2014

The 10 Largest Container Shipping Companies in the World

The 10 Largest Armies in the World: Who Should We Be Afraid Of?

Best Warren Buffett Quotes on Money You Need to Hear

The 10 Highest Suicide Rates by Profession

The 20 Most Underrated Movies of All Time

The 10 Fastest Growing Companies in America

The 10 Biggest Outlet Malls in USA

The 5 Most Popular Rap Songs of All Time

The 10 Countries that Eat the Most Meat

The10 Most Expensive Countries to Fly To

Subscribe

Enter your email:

Delivered by FeedBurner

X

Thanks! An email with instructions is sent to !

Your email already exists in our database. Click here to go to your subscriptions

Insider Monkey returned 47.6% in its first year! Wondering How?

Download a complete edition of our newsletter for free!