Key takeaways

  • Student credit cards are unsecured credit cards that help college students build credit, often while earning rewards.
  • Secured credit cards require a refundable cash deposit as collateral, but they also build credit and may offer rewards for spending.
  • Where student credit cards are geared to adults with limited credit history or no credit to speak of, secured credit cards can work for students with limited credit or people (even non-students) with bad credit.

If you’re trying to decide between a student credit card vs. a secured credit card, you should know these card products are similar but not exactly the same. Where student credit cards are unsecured cards that don’t require a cash deposit as collateral, secured credit cards require a minimum deposit (usually $49 to $200) to begin building credit with a card you can use for purchases.

That said, secured credit cards come with one benefit that makes them a better choice for a variety of people; They are easiest to get approved for among all types of credit cards available today. Read on to learn more about the secured vs. student credit card debate, the pros and cons of each type of credit card and how you can decide which one is best for you.

When to choose a student card

Student credit cards are for college students who want to earn rewards and build credit for the future. As such, many let students get approved with minimal credit history, and some offer approvals for applicants who don’t even have a credit score yet.

Because student credit cards are geared to young people who haven’t quite built up their credit yet, they tend to come with low limits and few benefits to speak of. However, many student credit cards offer rewards for spending with no annual fee, and some give you a free credit score and other credit building or tracking tools.

Pros of student cards

  • Get approved with limited credit or no credit. It’s possible to get approved for a student credit card when you have no credit history at all provided you meet other requirements that vary by card issuer.
  • Build valuable credit history. Student credit cards report your payments and balances to the three credit bureaus, thus they help you build credit you’ll need later in life.
  • Earn rewards for spending. Many student credit cards offer cash back or other types of rewards for each dollar you spend, which is a major advantage for young people who are strapped for cash.

Cons of student cards

  • You have to be a college student to apply. Student credit cards typically require you to attend college to apply, so they won’t work for everyone.
  • Getting approved with bad credit may be difficult. While student cards advertise easy approvals for limited credit, getting approved with a low credit score or negative information on your credit reports may not be that easy.
  • Rewards and perks are limited. Student credit cards tend to come with low limits, and the rewards and perks may not be that great.

When to choose a secured card

While student credit cards are for college students who need to build credit, secured cards can be for students or anyone else who needs help building or repairing credit. Secured credit cards are so easy to get approved for that they are often marketed to people with low credit scores and bad credit due to mistakes made in the past.

As we mentioned, secured credit cards do require a cash deposit to get started, but the deposit is refundable when the account is closed or upgraded in good standing. Secured credit cards also report to the credit bureaus to help users build credit, and many offer rewards with no annual fee.

Pros of secured cards

  • You don’t have to be a student to apply. Anyone can apply for a secured credit card whether they’re a college student or not.
  • Build credit with responsible use. These cards report to the three credit bureaus, which can help build credit for the future.
  • Earn rewards for spending. Many of the best secured credit cards earn cash back for each dollar spent.

Cons of secured cards

  • Collateral requirement. You’ll have to put down a cash deposit to begin building credit with one of these cards.
  • Rewards and perks are limited. Rewards and cardholder benefits are fairly limited among secured credit cards.
  • Potential for very low starting credit limit. Your security deposit typically equals your credit limit, so putting down $200 in collateral can mean having a credit limit of just $200 on your card.

Alternative ways to build credit

If the decision between secured card vs. student card has been difficult to make and you want to consider more options, check out some alternative ways to build credit.

Become an authorized user

Becoming an authorized user on a trusted friend or family member’s account can also help you build credit, but you’ll want to make sure the primary cardholder who agrees has a good credit score and a long history of responsible use.

If they add you to their card as an authorized user, you essentially get the chance to “piggyback” off their monthly payments to add depth to your own credit reports.

Consider a credit-builder loan

Credit-builder loans have you make monthly payments to a savings account or certificate of deposit (CD) in your name, and they report the payments to the credit bureaus to help you build credit. In the end, you get the money you paid toward the loan back, minus a nominal amount of interest and fees.

Use an app that builds credit

Several credit-building apps can also give you a leg up when it comes to improving your credit, and often for free. As an example, Experian Boost lets you get credit for payments like subscription services, rent and utility bills on your Experian credit report.

Look at starter credit cards

You can also look at starter credit cards that are unsecured but not necessarily geared to students. Cards in this niche aim to help people build credit, and they tend to offer some basic perks along with low credit limits to start.

Examples of starter credit cards to check out include the Capital One QuicksilverOne Cash Rewards Credit Card and the Petal® 1 “No Annual Fee” Visa® Credit Card.

The bottom line

If you’re considering student credit cards and secured credit cards, you should know that either option can help you build credit. Both types of cards are meant to help you improve your credit score and learn positive habits so you can move on to cards with better perks and rewards later on.

The key to using secured credit cards or student cards to your advantage is keeping debt at a minimum and always paying your bills on time. If you do those two things, you’ll eventually get your credit to where you want it to be.