Key takeaways

  • A student credit card works the same as other credit cards except it’s designed with benefits that matter to students and offers student-accessible approval criteria.
  • The primary benefits of a student credit card include building credit, learning to use credit responsibly, having a backup payment option for emergencies, secure payments and earning rewards for students.
  • Choosing a student credit card requires you to look beyond the perks. Review the interest rates, fees and terms of the credit card you’re considering.

College can come with a whole host of expenses outside of the cost of tuition — from books and rent payments to groceries and gas. In fact, full time students from public two-year universities, public four-year colleges and private four-year universities spend thousands of dollars beyond their base tuition and fees.

Let’s say you’re a full-time undergrad student at an in-state public college. In the 2023-2024 academic year, you would have spent an average of $12,770 for room and board plus another $1,250 for books and supplies, according to a 2023 College Board report. The report further details that you would have spent an average of $1,290 on transportation and $2,270 in other expenses. That adds up to a grand total of $17,580. If you’re attending a private university, those costs are slightly higher. The expenses you have personally could vary from these averages, so you may find it useful to calculate your student budget for more exact numbers.

Sure — you could pay for these costs with cash or a debit card, but a student credit card allows you to earn rewards for your spending. Student credit cards are normal credit cards, but they’re designed for students who are new to credit. They often have no annual fees as well as student-centered cardholder benefits and rewards programs, to boot. Importantly, they also have approval criteria that align with students’ typically lower incomes and new-to-credit status.

If used responsibly, student credit cards can help you build your credit history. You’ll need a strong credit history for your future financial goals like buying a car, getting your first apartment or buying a home. So if you know you have to spend a few grand while you’re at college anyway, you might as well benefit from it by earning rewards and building your credit.

For instance, recent college graduate Daniel Kelton used a student credit card to build his credit after learning that he needed a new car, but had no credit history. After getting out of the military and going back to school, he chose to get the Capital One Quicksilver Student Cash Rewards Credit Card and used it for a year to build credit before applying for a car loan.

“Over two years, my credit score has risen to the excellent credit score range,” Kelton says. “The good credit limit on the card has been a big benefit, because it helped me keep my credit utilization low. Now that I’ve got a credit history built, I’m looking to transition into a card with more rewards.”

If a student credit card sounds like the right move for you, there are a few perks and benefits you’ll want to look for before submitting your application:

  • Rewards and how they’re structured
  • Credit building opportunities
  • Student-specific perks
  • Welcome bonuses

You’ll also want to learn how to choose a student credit card so you can make your decision confidently. We’ve reviewed the best student credit cards out there and the top contestants have these benefits:

Automatic credit line reviews

When you start out with a student credit card, you’re often starting with limited credit or no credit which translates to a lower credit limit if you’re approved. However, many student credit cards include automatic account reviews.

That means the card issuer regularly reviews your account to ensure you’ve been making on-time payments and otherwise using the credit card responsibly. If so, the issuer can choose to raise your credit limit. That’s what happened with Kelton’s student credit card.

“To me, the value of the card was that it didn’t have substantial restrictions despite my lack of credit score,” he says. “It wasn’t secured and it gave me a decent credit limit ($3,000) — it was a fully-fledged credit card that I could get without much credit. I didn’t have bad credit, I just had no credit. After a year or so of good standing on the account, the issuer raised the limit to over $5,000.”

With more available credit, you can lower your utilization ratio and, in turn, improve your credit score. That credit limit increase helped Kelton take his credit score to the next level and achieve his goal of getting a loan for a new car.

Lower fees

Student credit card issuers know you’re just beginning to learn the ins and outs of credit, so they tend to give you a break on fees. It’s not unusual for typical credit card fees, such as late fees and annual fees, to be low or non-existent on student credit cards. A common reduction, for instance, is $0 for your first late payment and then the full late fee the next time it happens.

Furthermore, there are multiple student cards that don’t charge foreign transaction fees, so feel free to carry them along for that study abroad semester or epic Spring Break adventure.

College student reward programs

As a student, your spending likely looks different than that of a more experienced credit card user. That’s why student cards often have rewards programs tailored for college students. Most student cards come with a percentage of rewards on common purchases like streaming services, groceries, gas or restaurants. Usually these rewards are in the form of cash back because what college student couldn’t use some extra cash?

As a testament to the rewards that student credit cards can offer, Kelton also shared how he earned a significant amount of cash back from using his student card strategically while building his credit:

“I’ve also earned more than $400 in cash back,” he explains. “I started paying for all my groceries and gas on the card. And I paid it off every month so I wasn’t racking up interest payments.”

By paying off the balance each month and avoiding interest charges, those rewards went straight to his pocket.

Welcome bonuses

Also known as sign-up bonuses, welcome bonuses on student cards typically come in the form of cash, points or a statement credit once you meet certain spending requirements. Earning a welcome bonus can be an easy way to boost your rewards from the get-go to use toward things like school supplies, dorm essentials or to simply pad your savings.

Secure shopping

Whether you choose to shop online or in stores, there’s always the possibility of scammers grabbing your card information and running up a tab. If your credit card information is compromised and used to make fraudulent purchases, your liability is limited to $50 under federal law. Nearly all credit cards have zero liability protection as long as you report the fraudulent activity within 60 days. The same isn’t true for debit cards and cash.

Credit-building education tools

One of the best things you can do as a student credit card owner is stay on top of your credit profile. The healthy credit habits you develop today can serve you down the road, so anything promoting this goal is a great asset.

For example, Capital One’s suite of student cards have access to CreditWise, a service that helps you monitor your credit profile and protect you from identity fraud — from access to Experian and TransUnion credit report change alerts to dark web scanning and Social Security number tracking.

The bottom line

Student credit cards come with plenty of benefits and perks that could make your life on campus easier. But those benefits can easily be negated if you don’t use your student card responsibly. Developing healthy credit habits should be your priority over earning as many rewards as possible since interest charges can quickly eat away at any rewards you’ve earned.

Overall, you can use your student credit card to help support your credit-building journey and reach other financial goals. Once you master these concepts with your student credit card, you can apply your good credit management skills to other areas of your financial life.