Note: All Orchard Bank credit cards are now issued by Capital One.
There are a number of good options for starter credit cards depending of course, on the specific needs of the credit card applicant. Those consumers who are new to credit, such as students and other first time credit card applicants will be looking at different credit card products than those who are looking to rebuild their credit or have gone through a bankruptcy.
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First time credit applicants should be looking for a basic credit card to serve their specific needs. The most important factors in shopping for a new credit card are interest rates, fees and the all important credit limit. How much you might have to pay in this case is less important than using and managing your new credit cards carefully, to start building a solid credit history.
What To Look for in Your First Credit Card
The Credit Card Act of 2009 dramatically changed the way that credit card companies were able to market to college students and other first time applicants. Students must now qualify for a new credit card or provide the bank with a qualified co-signer.
New applicants still have several options when applying for credit. First, if they qualify, they may apply for a new credit card on their own. Banks that will approve first timers often feature very low or nominal credit lines of only a few hundred dollars. Interest rates will also tend to be fairly high for first time applicants, averaging 19% or 20%, and there are usually annual fees.
The Best Student Credit Cards
According to the AOL website, Daily Finance, students needing to establish credit should shop for credit cards that are cheap; cards with no annual fees and low introductory interest rates are the best options.
One card that AOL recommends is the Citi Dividend Platinum Select credit card, specifically designed for college students. The Citi card offers 5% cash back on virtually everything a student might need for the first six months, from gas and groceries to utilities and even convenience store purchases.
As a bonus, spend $1,000 in the first three months with the Citi Platinum Select card and earn $200! There are also no interest charges during the six-month introductory period, but after that, rates will shoot up to a variable APR of between 15.99 and 22.99%.
This writer’s pick for a great cash back credit card is the Discover Cashback Bonus credit card. Discover offers a zero percent introductory offer on your credit card rate for the first nine months and a variable rate of 12.99 to 19.99% thereafter.
There is no annual fee for the Discover Card and rewards range from 1% to 20% cash back! Moreover, rewards never expire with the Discover Cashback Bonus card!
Adding a second card to a traditional American Express green card can be a great option for extending credit to your son or daughter in college, while maintaining control over the account. As most know, the AMEX green card requires balances to be paid in full every month.
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Parents can go on line and set or reset monthly spending limits depending on the student’s needs and never have to worry that they’ll run up a tab too high to manage. The cost of an extra card is cheap, only $30, in comparison to the $95 annual fee for the primary cardholder.
For parents willing to co-sign, your college student can get their own AMEX green card. Either way, you’ll be helping your college student establish a credit history in their own name while teaching them how to manage their monthly bills and expenses.
What To Do If You Don’t Qualify or Have a Co-signer
If a new applicant can neither qualify on his own nor find a suitable and willing co-signer, a third option would be to apply for a secured credit card. There are many secured credit card choices available in the marketplace. Probably the best known among them is Orchard Bank.
Orchard Bank offers a low APR secured card at just 7.99%, and will waive its $35 annual fee for the first year. A minimum deposit of $200 is required
Another recommendation for a secured credit card according to the Main St financial website, is the Capital One Secured MasterCard. Like Orchard Bank, a minimum $200 security deposit is required.
The annual percentage interest rate of 19.8% and $24 annual fee may not make the Capital One card your first choice, but this credit card is known for helping cardholders build credit fast. Each time you pay your Capital One bill on time, your credit line increases!
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