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Author: Griffin Miller | Last Updated: September 10, 2018
Bankrate’s team of credit card experts have analyzed over 100 credit cards in the student card category. Using Bankrate’s scoring matrix they have awarded each credit card a unique Bankrate score out of 100. The score can be used to help you identify the best student credit card for you.
The folks here at Bankrate evaluated each card on aspects such as the cards’ variable APR and penalty APR, annual fee, sign-up bonuses, rewards value, and any extra fees or discounts. To ensure that these cards are the best fit for a students lifestyle we have paid close attention to APR, the cards annual fee, rewards, and extras and discounts.
This student card offers rewards in the form of cash back on every single purchase made. As an added incentive, the rate at which you earn rewards increases when you make payments on time. Overall, the Journey® card is a great choice for students interested in getting into the rewards game. Use this card wisely and you’ll likely end up a great candidate for some of the best general rewards cards out there after graduation.
Discover rewards cards usually offer a first-year match of all rewards earned. The Discover it® Student chrome card is no different—with this card, you’ll earn cash back on everything, and even more rewards for purchases made at gas stations and restaurants. At the end of the first year, all the cash you’ve earned will be doubled.
The Discover it® Student Cash Back card offers a higher rewards rate than its chrome counterpart, but on rotating categories. To make the most of your rewards, you’ll have to track the bonus categories offered by Discover each quarter and spend accordingly. With an introductory APR offer and special reward for good grades, this card is a great contender for students who already have fair credit.
Unlike most rewards student credit cards, the Citi ThankYou® Preferred Card for College Students offers points instead of cash back. Points are redeemable for gift cards, electronics, and more at Citi’s online redemption portal. Savvy cardholders can typically glean bigger rewards out of points than pure cash back—this card is a great introduction to the points rewards game. Use this card to learn the ins and outs of point redemption and build your credit score while doing so.
A rewards card with perks specifically designed for students, the Deserve® Edu Mastercard for Students offers great perks and security features like price protection, ID theft protection, and a car rental collision damage waiver. Consider applying if you’re looking for a cashback card available to those with no credit.
Self Lender’s Credit Builder Account is a specific kind of credit account that is designed for college students who would like to get a jump on saving for the future. In addition to offering regular credit bureau reporting, this account will help you get a small loan to be saved in a Certificate of Deposit (CD) bank account. At the end of the account term, your saving unlocks, making this a great option for first- or second-year college students.
It’s common for young people, especially college students with mounting loan debt, to be apprehensive about applying for credit cards. In fact, 47% of college students age 18-24 don’t have a credit card simply because they want to avoid debt as much as possible, according to research from Sallie Mae and Ipsos. With a better understanding of credit and how a student credit card can benefit you in the long run, you’ll see that if you are a good candidate, applying for a student credit card is a wise first step in long-term financial wellness.
Student credit cards provide you with a line of credit, usually $1,000 or less. When you use the card, money isn’t directly drawn from your bank account. Instead, the issuer (Capital One, Discover, etc.) pays for the expense and records the amount you charged. The total amount you owe to the issuer is called a balance.
If you pay off the balance in full and on time every month, you’ll never owe more than what you spent. Though, credit card issuers allow you to make small “minimum payments” and carry the rest of the balance month-to-month. When you carry a balance, you’ll have to pay interest on the total amount. Your interest rate is also known as the Annual Percentage Rate or APR. APRs vary across all credit cards, but with a student card, you can expect your rate to be 14-25%.
To put it in perspective, let’s look at a common scenario and consider two possible outcomes:
Let’s say you put $500 on your student credit card to pay for this semester’s books. Your card has a high APR of 24.99% and a minimum monthly payment of $25 on high balances.
Categorizing credit cards can be somewhat confusing for everyone, especially those who are new to credit, but luckily for those in college, there are essentially two types of credit cards available to students:
So, how do you decide which type of student credit card to apply for?
As a rule of thumb, only consider applying for a student card with rewards if you:
Consider applying for a secured student card if you:
Annual Percentage Rate (APR) – Interest rate paid on balances carried from one billing period (month) to the next.
Penalty APR – The highest APR that will be applied to your account. Penalty APR is usually applied after you miss consecutive payments. To return to your original APR, you’ll need to make six consecutive on-time payments.
Credit Utilization Ratio – Your CUR is a measurement of how much of your available credit you are using. If you have a $5,000 credit limit and usually stick to a $500 per month budget, your CUR is at 10%. The lower your ratio is, the better. If you use up a large chunk (or all) of your available credit every month, your credit score may decrease.
Annual fees – Some credit cards have annual fees of $50 or more, though most student cards do not. Be sure to check for fees before applying for any card.
Credit bureau – Credit bureaus research and track your credit history. In the US, there are three major bureaus—Equifax, Experian, and TransUnion.
FICO – FICO is the company that compiles all of your credit history reporting and generates your credit score. FICO credit scores range from 300 to 850, with 850 being the best. Credit scores are one factor in determining your creditworthiness.
If you’re spending time gathering information on credit cards for college students, you’re already using the first good strategy for avoiding credit card debt:
Expenses for college students obviously go far beyond tuition. The College Board reports that the average on-campus student at a public, four-year, in-state university spent $1,250 on books and supplies in 2017-18. With the aid of a student credit card, the burden of those secondary expenses can be lessened and fit within a budget and schedule that works for you.
The first thing to consider before applying for a student credit card is your credit history. Start by answering the following questions:
If you have never had a credit card and you currently have no loans or steady income, your best option for getting your own credit card account is to have a parent co-signer. You might also be eligible to be added as a verified user on one of their credit card accounts.
If you already have a credit history, it’s important to know what your score is. Determining your credit score will let you know which cards you are likely to be approved for. Every time you apply for a credit card, your score will briefly drop by five points, so its best to do it as few times as possible. Applying for cards you are declined for will still negatively affect your score.
First, request copies of your credit report, which you can do for free once a year from each of the three credit bureaus. You can also get a free credit report and credit score here.
Once you know your credit score, you’ll have a better sense of what type of student credit card to apply for. If you have a good score, take a look at rewards student credit cards. If you have an average to poor score, consider a secured card.
Also, consider the following:
Once you have pulled your credit report, checked your credit score, and narrowed your search to one perfect card, you’re ready to apply.
|Card Name||Bankrate score||Best for|
|Journey® Student Rewards from Capital One®||80/100||Flat-rate cash back and studying abroad|
|Discover it® Student chrome||93/100||Best for gas, dining, and large purchases|
|Discover it® Student Cash Back||93/100||Cash back bonus categories|
|Citi ThankYou® Preferred Card for College Students||82/100||Earning rewards points|
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