Take the right credit card to college

Pencils with ABC blocks

You want to pick the credit card that comes with the best rate and lowest fees to use during college -- not the one with your school mascot.

Credit card companies used to flood campuses at the start of the school year with booths that offered free T-shirts, hats and other giveaways for signing up for a card.

But the 2010 Credit Card Accountability, Responsibility and Disclosure Act put an end to that.

Credit card companies can no longer offer free stuff if they're soliciting customers on campus. Applicants between 18 and 21 must also prove they earn enough money to pay the bill or get mom and dad to cosign the agreement.

The act is trying to curb credit card debt among college-age consumers, which has increased in recent years.

A whopping 82% of college students don't pay off their balances each month, according to a 2009 biennial study by Sallie Mae, the big student loan company.

As a result, graduating seniors now begin their careers with an average of $4,100 in credit card debt, up from $2,900 in 2004.

That's why it's important to shop around for a card that features low rates and reasonable terms -- not a lot of prestige or reward points. (Trust us: You won't accumulate enough points to make it worthwhile.)

Ignore the hype and you could save hundreds of dollars a year.

You need to look for a card that offers these three advantages:

No monthly or annual fees. There's no reason to pay $39 to $69 a year or more to carry a credit card.

Free online access to your account. To avoid big surprises when the monthly statement arrives, you need to be able to track how much you're spending and what you're spending it on.

Reasonable interest rates. Don't be suckered into a credit card based on the introductory or teaser rate that's only in effect for the first few months.

The regular rate on most of the cards you'll be offered will be variable.

Look for one that charges the prime rate -- the rate banks charge their best commercial customers -- plus a premium of anywhere from 5.99% to 12.99%.

With the prime at 3.25%, that means you're looking for a card that currently charges 9.24% APR to 16.24% APR.

Avoid credit cards with your school's mascot or logo.

Colleges make a lot of money by licensing their name to credit card companies, who then market the cards to students and alumni. Unfortunately, they often come with shockingly poor terms.

Another perk to skip: Elaborate reward programs.

Realistically, you're not going to be spending enough to earn a useful amount of points or miles until you graduate and land a full-time job. (Even then, you may not spend enough to make it worthwhile, unless you do a lot of traveling.)

Right now, you need one card -- absolutely no more than two -- with reasonable rates and fees.

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