Many are aware of the many financial hazards college students face during their first years of independence. One such hazard is the easy availability of credit. Credit card issuers can be seen on almost every campus promising free shirts, mugs, and other gifts for applying for their credit card. However, many students are unaware of the hazards of credit cards and spend more than they can afford (thanks to the high limits they receive), and consequently, plummet in to years of debt (after student loans and car loans are added to the mix). The result can be damaging to the student when he/she attempts to rent an apartment, buy a car, or apply for a job. The high interest rates the credit card issuers usually charge do not help the situation. Since college students usually have little credit, interest rates for student cards can near 20%, and even higher after a few late payments.

I am currently a college freshman and have heard all about the dangers of debt for students. I have a debit card, but I realized that I needed a credit card so I could establish credit, be able to take care of emergencies, and yield additional leverage in merchant disputes. When I turned 18, I decided that I would use my credit card only for Internet & phone purchases, for emergencies, and for when I didn't have the money but knew I would by the end of the month. The problem was I wanted to get a card with a reasonable interest rate (though I planned on paying off the bill each month) and great customer service.

My parents and grandparents have been members of USAA, a banking, investment, and insurance organization designed for those in the armed forces and their families. They all had USAA credit cards and never seemed to have any trouble with them. My parents also had a USAA checking account and had enrolled me in a special savings program for children (I have reviewed this section in another review, since USAA Savings Bank is the credit card division and other banking services are provided by a separate division).

When I turned 18, I received information regarding a special program for college students, including a USAA Mastercard. Unlike other banks, it was obvious that USAA was not in the business to make money off of my mistakes in the use of credit. Instead, they wanted to help me successfully master the use of credit and build a strong credit rating. The card could be opened without a co-signer; however, my dad was placed as a secondary accountholder as I asked for a joint checking account and was given a joint credit card as well.

Terms/Conditions: The interest rate was the lowest I had ever seen for a student card. USAA's college rate was a variable 10% APR. In fact, USAA is constantly at the top of the list for lowest student-card APRs on Bankrate.com, a leading rate comparison site. Also, to my surprise, the rate for cash advances was about the exact same rate as for regular purchases, something that is rare even for credit cards for normal consumers.

To advocate responsible credit use, USAA begins freshmen with a $500 credit limit, which is more than enough for me. The most I have ever had on the card was $350 for computer supplies, but I even paid that off by the due date. Each year, USAA will increase my credit line a little. By the time I graduate, I will have about $1500 on the card.

USAA also sends newsletters to its college students talking about budgeting and the importance of good credit, among other things.

The one feature I really like about the card is the option to have your photo and signature printed on the front. To do so, I called customer service and requested a kit. When it arrived, I attached a passport-size photo, signed a box, and returned the sheet in an envelope. About 2 weeks later, my new card arrived. The photo feature is a lifesaver as it adds extra protection against fraud. Since my parents have had their credit card numbers stolen several times and in a time where identity theft is increasingly common, having a photo card was a must. Now only if they offered it on their debit cards.

Account transactions can be viewed through USAA's website. It is very secure as a password is required to enter the general site and a PIN is required to continue to the banking functions. Statements can also be received online in PDF format (an e-mail comes when statements are available) and bills can be paid online using any bank account for free.

USAA's card had no perks for the first year I had the card. However, the company started offering a cash-rebate card last summer. I called to inquire if I could upgrade and they said I could (normally one must be eligible for USAA insurance in order to receive the cash rebate card, but since my co-signer is eligible, I received the upgrade). The only caveats are the low rebate percentage (0.35% for the first $2000 in annual purchases--I've seen higher) and the reduced grace period (20 vs. 25, which is still quite reasonable).

Customer Service: Unlike some credit card companies who require their customers to wait on hold for several minutes just to reach a live person, I have never had that experience with any USAA service. There is a special line for credit card customers and my calls have been answered in seconds, not minutes. In fact, I don't even get a recording; a courteous person picks up after a few rings. E-mail service through USAA's website is also fast. My questions and requests have been answered in hours rather than days.

USAA has been more than good to me as of recent. Not only did they forgive a bounced e-payment (which happened because my bank gave me an inaccurate routing number) but also ate a $45 charge I disputed but the merchant had not responded to.

Although the perks of other cards (and the free gifts) seem tempting, I see right through them and know that USAA is the only card I need to have.

Recommended: Yes