Sunday Reader Questions: Best student credit card?

There are so many credit cards out there, but students without income can only qualify for a few of them. What is the best student credit card? 

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When considering what the best student credit card is, you need to evaluate two different factors: (1) what are your reward goals? (2) what is your credit history?

If you’re a reader of my site, I’m going to assume that your reward goals are for travel. Also, as a student, I’m going to assume you have a limited income source and a short or non-existent credit history. If you do make an income, or have sufficient “household income” to qualify for elite cards, this article won’t benefit you.

As a student, you’re going to want two things: to travel as cheaply as possible and to develop your credit report. I’ve analyzed the impact of credit card churning on your credit report before. One of the key variables that impacts your score is the age of your credit report. To help that variable, I recommend getting a credit card as early as possible (for me, the day I turned 18), and keeping it forever. To that end, you’re going to want a card that has no annual fees,  but maximizes your rewards. I’d recommend getting the MBNA Alaska card (this is not a referral). Note that as of right now, their link with GreatCanadianRebates, which gives you a $60 rebate, is offline. It is expected to come back online soon.

The Alaska card gives you 25,000 Alaska Points, which are extremely valuable and can be used on carriers like Cathay Pacific, Emirates, British Airways, Fiji Airways, Korean Air, etc. It does have a $75 annual fee, but once that GreatCanadianRebates link comes back, it’s only $15 after the rebate. Nonetheless, $75 for 25,000 Alaska Points is a fabulous deal.

As a student, MBNA will give you up to $2500 in credit with little to no income. Once your first year comes to an end, you can convert your Alaska card into another MBNA card for free, but keeping the age of your credit line. I would recommend converting it into the MBNA Smart Cash (this is not a referral) card to avoid paying the $75 annual fee again. Use this card as your main card until you qualify for more premium cards. Once you get better cards, just toss this card in a drawer, use it occasionally (once every 6 months), and keep it forever. It will be a free card, and will also be your oldest card, which benefits your credit history

A huge bonus with MBNA cards, which you can even do as a student, is split some of your credit to approve an additional card. For example, you could convert your $2500 credit line into up to five $500 Alaska cards, giving you 125,000 Alaska Points (more than enough for Emirate First Class). Once the annual fee comes up for renewal on those cards, merge the credit lines together into the Smart Cash card and toss it in a drawer.