About Wells Fargo Cash Back College Card
College students tend to have very little or no credit history. The Wells Fargo Cash Back College Card can help you remedy that problem and, in the process, give you free cash while you’re doing it.
I know this sounds like some kind of salesy gimmick, but it’s true. Wells Fargo has crafted this card to not only cater to college students and those with low credit scores, but also to offer those same consumers a chance to take advantage of a cash-back rewards system and 0% interest.
What we want to do with this review is equip you with the knowledge you need to be a smart consumer who uses credit cards to your advantage rather than letting credit card issuers take advantage of you.
To meet that goal of equipping you to become a smart consumer, we’re going to cover the following aspects of the Wells Fargo Cash Back College card:
- Short-term benefits
- Long-term benefits
- Rates and fees
- Expert and consumer reviews
We’ll finish up the review with the card’s pros, cons and who we think might be able to take advantage of this card in the best possible way.
A Quick Note About Students Under 21
If you’re under 21 years old, you’ll need an adult co-signer to get the Cash Back College card. You’ll also have to show Wells Fargo that you have enough income to justify owning the card.
Both of these requirements are the result of the Credit CARD Act, CreditCards.com says. Protecting college students from predatory credit card issuers was one of the reasons the legislation was passed in 2009.
The Wells Fargo Cash Back College Card’s Short-Term Benefits
Before we get into the specifics of what you get in the first six months of owning this card, we want to point out that there are few options out there when it comes to credit cards for people with bad or no credit.
Of the cards we’ve reviewed, there are really only a pair of credit cards that offer solid benefits: the Discover it Secured and the Credit One Platinum.
The Wells Fargo Cash Back College card is a competitor with those two cards for one reason it offers cash back rewards.
Here’s how cash-back rewards work. The credit card company sets a rewards rate for certain types of purchases. Sometimes it’s 3% for gas and 2% for groceries. Other times is 2% for everything you buy.
You’ll Get 3% Cash Back the First 3 Months
One of the Cash Back College’s short-term benefits is that you’ll get 3% cash rewards on your gas, grocery and drugstore purchases the first six month you own the card.
As you make those purchases, Wells Fargo calculates your rewards and adds them to your rewards account that’s automatically set up when you’re approved for the Cash Back College card.
You can track your rewards balance as it grows and you can withdraw the balance several different ways.
You have the option of electronically depositing the cash back in a Wells Fargo checking/savings account, using it as a credit toward your credit card balance or withdrawing it from a Wells Fargo ATM in increments of $20.
You can also redeem the points at Wells Fargo’s Go Far online mall, where you can purchase gift cards, merchandise and travel.
You’ll Get 6 Months of 0% Interest on Purchases and Balance Transfers
This second short-term benefit is an interesting one, if only because most college students aren’t carrying balances on credit cards.
Why the 0% on balance transfers may not be needed? Only 56% of college-aged consumers have credit cards, CreditCards.com says, and 63% of them pay their balance in full every month.
How does this relate to a 0% interest credit card? Well, usually these cards are used to transfer a big balance from another credit card. But, if you don’t have a big balance, then it doesn’t quite make sense to transfer it to your Cash Back College card.
The only situation in which a balance transfer would make sense is if the balance you have is on a card with a high APR that’s costing you a lot in interest payments.
Why the 0% on Purchases May Be Helpful
On the other hand, the Wells Fargo Cash Back College card’s 0% interest on purchases may be a big help if you’re a college student.
Let’s say it’s the middle of the summer and you know that, at a certain point in the future, you’ll need to buy books.
The Cash Back College could be a big help to you. Why? Well, if you don’t have enough cash on hand to buy your books, you could sign up for the card in anticipation of buying books and then spread the payments out over six months.
However, this angle comes with one huge “Only if”: Use the method only if you have enough income to cover your monthly budget and pay off your card before the six-month deadline.
Once the six months of 0% is over, any balance you have on the card in month seven will get interest charges. There’s no sense in throwing away money on interest, so only use the 0% purchase APR if you know you can pay off the charges you put on it.
The Wells Fargo Cash Back College Card’s Long-Term Benefits
There isn’t much complexity to the Cash Back College card’s long-term benefits, but that doesn’t mean it’s lacking in perks.
1% Cash Back
Once the 3% cash-rewards bonus expires, you’ll get a 1% cash-back rewards rate on all your purchases. That’s average to below-average in the general cash back world, but when it comes to cards designed for people with low or no credit scores, it’s as good as you’ll find.
If you want to know how much that will make you over the course of a year, take a look at your monthly budget and identify which purchases you can make with your card. Add all that up and Multiply it by 12, then multiply once more by 0.01. The resulting answer is your cash back total for the year.
What you’ll need to remember, though, is that Wells Fargo will most likely give you a credit limit somewhere in the neighborhood of $500-$1,500. This card is considered a starter credit card, which explains the low credit limit.
Factor that in when you look at your monthly spending habits. If your bills are higher than your credit limit, pay your card off in full every week. That way, you can clear up space to make more purchases.
But, remember, only use this strategy if you have the income to pay off your card every week.
Cell Phone Protection
One of the cool features of nearly every Wells Fargo credit card is cell phone protection. Basically, Wells Fargo will give you up to $600 to replace a damaged or stolen cell phone. You can make two claims a year for up to $1,200.
There are a couple of rules you should be aware of:
- You have to pay your cell phone bill with your Cash Back College card
- The insurance doesn’t cover lost phones
- You’ll pay a $25 deductible when you make a claim
Another long-term benefit you get with the Cash Back College card is Wells Fargo’s My Money Map feature.
This financial tool is available through your Wells Fargo online account. My Money Map generates a spending report and also has a budgeting tool you can use to regulate and adjust your spending.
My Money Map also includes a savings tool as well as a library of resources to help you set up a financial plan and learn the basics of personal finance.
The Wells Fargo Cash Back College Card’s Rates and Fees
We’re going to list the Cash Back College’s rates and fees and then do a quick explanation afterwards:
- APR: 12.15-22.15%
- Balance transfer fee: 3-5%
- Annual fee: None
- Late/returned payment fee: $37
“APR” stands for annual percentage rate. If you don’t pay off your balance in full every month, you’ll be charged interest based on your APR. What credit card companies do is charge you interest every day, then add it up and that’s what you pay for the month.
To do that, Wells Fargo divides your Cash Back College card’s APR by 365 to get a daily interest rate. Then, they multiply that number by the balance you had every day of the month.
But here’s the thing … you can avoid all this by paying off your balance in full every month.
Balance transfer fees are what Wells Fargo will charge you when you transfer a balance to your Cash Back College card. They’ll charge you 3% of the amount transferred in the first six months of owning the card, then 5% after.
Expert and Consumer Reviews of the Wells Fargo Cash Back College Card
Experts note that the card is a decent choice for college students because you can earn cash rewards and there is no annual fee.
The customer reviews we read were mostly positive, with several people saying they had the card during college and enjoyed the experience. The negative reviews we read complained about Wells Fargo’s customer service.
Our Closing Thoughts About the Wells Fargo Cash Back College Card
The Cash Back College card has a very simple set of pros and cons, which is good, because it will help you figure out if this card is right for you.
Pros of the Cash Back College Card
We think, based on our research, that the Cash Back College’s 1% rewards rate and the absence of an annual fee are the card’s strengths. We also like how Wells Fargo has integrated budgeting, spending and savings tools in their online resources.
Cons of the Cash Back College Card
Considering that this card is designed for college students who have little to no credit history, we think there aren’t any legitimate drawbacks to this card.
Our only advice is this: If you’re traveling abroad, using your Cash Back College card will result in a 3% foreign transaction fee every time you make a purchase.
The Final Word: A Good Option for Students
All in all, we think the Wells Fargo Cash Back College card is a solid option if you’re looking for a credit card to build your credit history.