Question

Kurt is a college student, living on campus, who wants to open a credit card in order to start building his credit history. He plans to charge no more than $100 per month, and he will pay it off every month using his part-time job income. Which card offer makes the MOST sense for Kurt

Answer 1

A card offering 2% cash back with no annual fee.

Answer 2

There are no options listed, but there are several credit cards that are marketed specifically towards college students that basically have no credit history. The best part is that they do not charge fixed fees, so basically you would pay only if you use them. I searched a few of them and found: Discover it Student, several Capital One products, Deserve EDU, and others.

Since this credit cards focus on college students with no credit history, the interest rate is relatively high, near or above 20%. Discover it Student charges a 10.99% rate for the first 6 months, but then it increases to a variable rate. The other companies charge higher starting the first month. Discover it also charges no late fees, although if Kurt wants to improve his credit history, he should pay on time.