Responsible credit card customers pay their minimum balance on time, eliminating the accrual of interest. Paying your balance in full every month, and thus using your credit card and rewards wisely, makes it worth the effort to accrue rewards on your spending.
Citi offers its Citi® Dividend® Card for College Students to help students begin building their credit history. The card provides rewards for spending, but those rewards only provide value to those who pay off their entire balance every month.
Learn more about the Citi Dividend Card for College Students:
Key Features
- Earn Cash Back Rewards. Students earn 1% cash back on most purchases, and 5% back on various spending categories that change each quarter – up to $300 per calendar year.
- Citi Bonus Cash. Customers have the opportunity to earn 5% cash back on purchases from over 400 retailers featured on Citi’s Bonus Cash Center website.
- Introductory APR Offer. Cardholders receive a 0% introductory APR on purchases for the first seven months after opening their account. Students then receive a standard variable APR equal to 13.99% to 23.99%, depending on their creditworthiness.
- Fees. There is no annual fee for this card, but there is a foreign transaction fee of 3% for purchases made outside of the U.S.
Advantages
- Decent Cash Back Rewards. The Dividend Visa Card offers 1% cash back on all purchases and 5% on rotating categories of spending.
- 0% APR for 7 Months. The introductory APR can save you money on interest charges, but avoid the temptation to rack up charges that you cannot pay in full each month.
- Bonus Cash Offers. You can enjoy additional savings when you make purchases through Citi’s online shopping portal, with no limits on the cash back earned through the Citi Bonus Cash Center.
- No Annual Fee. Students shouldn’t have to pay an annual fee to get a basic credit card.
- No Co-Signer. You do not need a co-signer to apply for this card, allowing college students to build credit history.
- Protection for Cardholders. College students with credit cards have an increased risk of identity theft. The Citi Photocard displays your photo on the front of your card, to help reduce the risk of identity theft. In addition, Citi offers virtual account numbers that you can use when shopping online, so you don’t have to reveal your real credit card number to merchants.
Disadvantages
- High Interest Rates. This card, like other cash back rewards credit cards, has notoriously high interest rates. Students quickly learn a very expensive lesson if they fail to pay off their cards each month.
- Foreign Transaction Fees. The foreign transaction fee quickly becomes unwieldy for students who travel internationally. Many other cards have no foreign transaction fees.
- Enrollment Hassles. Customers appreciate the extra 5% cash back on certain purchases, but may not appreciate the hassle of going online and enrolling every three months.
- Enticement to Spend. Waiving interest charges on purchases for seven months, and offering increased cash back may encourage college students to spend more money. Young adults trying to develop good personal finance skills should instead focus on building their credit histories, and carefully budgeting income and expenditures.
Final Word
The Citi Dividend Card for College Students can help you build your credit history while earning rewards. Credit cards include many features that may tempt students to incur debt, and as with any student credit card, cardholders and their parents must ensure responsible use of the card. You can begin building a good credit history by limiting the number of cards you use, and paying credit card balances in full each month.
Do you have the Citi® Dividend® Card for College Students? How does it stack up compared to other student credit cards?
