Students, don’t get wowed by credit card bonuses

College students aren’t exactly credit card happy these days. But credit card issuers are rolling out some attractive deals that are designed to put more plastic into backpacks.

If you’re a college student shopping for a credit card, it’s possible to find better rates and terms than cards that were marketed to college students before card regulations went into place in February 2010, according to an analysis by CreditCards.com.

“Today’s student cards tend to have competitive rates and rewards,” said Matt Schulz, senior industry analyst for CreditCards.com.

A sampling indicated that the average student card interest rate is about 13.4 percent now, down from about 16 percent before the Credit CARD Act went into effect in February 2010, according to CreditCards.com.

The Credit Card Accountability Responsibility and Disclosure Act of 2009 put rules into place to protect young consumers.

Now, card issuers cannot send pre-approved offers to students who are younger than 21 without the consumer’s consent. Consumers under 21 can qualify for credit cards if they have a source of income or a co-signer. Card issuers cannot use gifts or goodies to market credit cards to students on campus or at school-sponsored events.

Only 14.4 percent of consumers ages 18 to 20 had opened at least one credit card in 2012. That compares with 33.6 percent in 2007, according to data from the Consum- er Financial Protection Bureau Consumer Credit Panel.

But we are seeing more efforts now to market to college students by some issuers. Discover, for example, launched an offer for new student card members that includes an extra $20 bonus if their grade point average is 3.0 or equivalent or higher each year they are enrolled in school for the first five years after opening the account. Other rewards exist as well on purchases.

What should you look for when shopping for a credit card for college? Here are some tips:

■ Don’t get wowed by the signing bonus.

Yes, some credit cards are offering what’s seen as a signing bonus to college students. The BankAmericard Cash Rewards Credit Card for Students, for example, has an online deal for a $100 bonus, if you make at least $500 in purchases in the first 90 days of opening your account. Don’t be tempted to spend more than what’s within your budget to get a bonus.

■ Be wary of 0 percent offers.

Student credit cards are offering introductory rates of 0 percent on cards. But some of those offers can range from six months to 12 months. Many of the 0 percent offers are on purchases; only a few offer 0 percent on balance transfers. It’s to easy to forget that your 0 percent rate is no longer available at spring break.

■ Pay attention to fees and rates.

Some cards marketed to students do not have a penalty APR, meaning your annual percentage rate won’t go up for missing payments. But there might be other fees, and cards with variable rates could see a jump after the prime rate heads higher.

Susan Tompor is a personal finance columnist for the Detroit Free Press