Verdict: For students looking to establish credit but would rather not get a secured card, a student credit card is a great option. The Chase +1 Student Credit Card offers a variable APR slightly higher than the national average for student cards, but provides other benefits that make it worthwhile.

Most importantly, this card gives students a head start on using credit responsibly, with free tips and tools for building credit and a behavior-based rewards program. Ideally, students will pay off their balance in full before the 20-day grace period ends, so the relatively high APR won’t matter.

Overview:
With no annual fee, “Karma” points that students can use toward merchandise, charitable causes, or even to share with friends, and free credit-building tips, the Chase +1 Student Credit Card shows it is tapped into how today’s youth thinks. A tie-in with Facebook might, in fact, make this the hippest student credit card on campus, in spite of its 17.24% (or 21.24%) variable APR.

Another bonus: There is no over-the-limit fee, and the late payment fee is reasonable and dependent upon your balance. The card rewards good behavior without going overboard for penalizing carelessness – a good philosophy for teaching students about credit management.

How This Card Works: The Chase +1 Student Credit Card is a legitimate credit card issued from a major bank, available to students with little or no credit history.

In lieu of a conventional rewards program based on dollars spent, the Chase +1 credit card offers Karma Points. Students earn Karma Points for good credit behavior.

For instance, students earn Karma Points for:

• Paying bills on time
• Taking the Credit Essentials Quiz

Karma Points can be used to donate cash to charitable causes, make purchases in the Chase +1 store, or to give to friends on Facebook. I’m not sure why students would want to give away their Karma Points except, I guess, for good karma. This card excels at teaching not only good credit management, but charitable giving.

The Chase +1 store offers a good selection of merchandise that students would want, including concert tickets, digital cameras, and MP3 players.

Benefits: It’s easy to rack up Karma Points with the program. You’ll earn 20 points the first time you use the card to make a purchase, transfer a balance or write a convenience check. (Cash advances do not count.) You’ll earn 2 additional Karma Points for each month the account is in good standing and you pay the bill on time. If you pay your account on time and stay within your credit limit for 6 consecutive months, you earn an additional 8 points.

Fees: This card has no annual fee, and offers a reasonable late payment fee structure.

• $15 on balances up to $100.00
• $29 on balances of $100 to $250
• $39 on balances of $250 and over

There is no over-the-limit fee, but watch out – one late payment or going over your credit limit will give you a default APR of almost 29.99%,  plus you’ll miss out on Karma Points for that month, as well as your bonus points for that six-month period.

The balance transfer and cash advance fee is 4 %, but not less than $5 and $10, respectively.

Pros:

• No annual fee
• No over-the-limit fee
• Fun rewards structure that teaches good credit management
• Tips and tools to help students build good credit
• Interface with Facebook
• Encourages charitable giving
• 20-day grace period

Cons:

• High default APR
• Regular APR is higher-than-average for student cards

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