Key takeaways

  • Student credit cards can come in handy for emergencies, large purchases and building your credit history.
  • Student credit cards are designed with students and have rewards geared toward students' needs.
  • If keeping tabs on your daily expenses seems like too much of a hassle, then you're probably not ready for a student card.

Going to college isn’t just about getting a degree and taking the first steps toward a rewarding career. It’s also about learning how to make the right choices in life, including those related to personal finance.

One choice most college students have to make is whether or not to get a student credit card. A credit card can come in handy for emergencies or when you need to make a large purchase, and it can help you build your credit history.

But before you sign up for one, it’s important to understand the pros and cons of student credit cards so you can make an informed decision. We’ll take a look at what student credit cards are all about and help you decide if one is right for you.

Pros and cons of student credit cards

Student cards have pros that may appeal to you and cons that may drive you away. It’s important to consider both when deciding if a student card is right for you.

Pros of student credit cards

Some of the main reasons why you may want a student card include:

  • They’re easier to get than standard cards. The eligibility requirements of most student credit cards are a lot easier to meet than standard credit cards. Minimum income requirements are normally lower, and there are several sources of income you can list as a student apart from having a job.
  • You can qualify for one without a credit history. Besides income requirements, a credit score is one of the reasons most students don’t have access to standard or premium credit cards. Student cards require a lower credit score or even no credit score at all for you to apply, making them a good option for a first credit card.
  • They’re a great way to start building your credit. A student card is still a credit card, so how you use it impacts your credit score. This makes these cards one of the best options to start building your credit early on.
  • Some offer special perks for students. While some student cards don’t offer rewards, some do. In most cases, these rewards are tailored to the average student’s spending habits, and redemption options are tailored to their needs.
  • You can upgrade to a standard card upon graduation. Some credit card issuers and credit unions will let you upgrade to a standard card after graduation, giving you access to a higher credit limit and the chance to build your credit score even more.

Cons of student credit cards

Although there are advantages to student cards, there are also some disadvantages you should keep in mind before signing up for one:

  • Lower credit limits. Since most students don’t have a credit history yet, it’s common for credit card issuers to grant lower credit limits on their student cards. This can be a good thing because it makes it harder for you to overspend and build credit card debt. Once you prove your creditworthiness by making on-time payments, your issuer may consider increasing your credit limit.
  • Higher interest rates. College students are considered high-risk borrowers. Credit card companies will charge higher interest rates (above 27 percent, in some cases) to compensate for the risk of lending you money.
  • Fewer rewards. Although some student credit cards come with rewards programs, they usually offer fewer benefits than their regular counterparts. If you’re interested in getting free flights or hotel stays through your student card, you’ll likely be disappointed.

Is a student card right for me?

Student credit cards are designed with students and individuals with no credit histories in mind, so while there may be certain disadvantages (high APRs, low credit limits and limited rewards), there are rewards geared toward students’ needs.

Learning about credit cards

For most students, a student card may be a solid option to consider as an introduction to credit. Getting a credit card can be intimidating as it comes with risks of debt and damage to your credit score. However, there are also plenty of benefits that come with it.

Students can get accustomed to not only using it and paying it off, but can figure out what is the best use for it, such as groceries or travel. You can also get used to managing debt as well as how to earn and redeem credit card rewards.

Plus, there are certain safety nets that will help students learn the do’s and don’ts of credit. For example, some student credit cards may waive your first late payment, but a late payment fee will appear later on if you continue to miss payments.

Building your credit

It’s also the right choice for those who want a fast and reliable way to pay for certain recurring payments and daily expenses while building your credit at the same time.

By building a good credit score early (FICO score 670-739), you’ll be able to apply for other lines of credit, such as car loans, better credit cards or even mortgages, earlier and with more ease. Your credit score can also be considered when looking for a place to rent or sometimes a job.

While it can seem daunting, building credit doesn’t automatically mean you’ll go into debt. If you’re worried about the higher interest rate, this drawback can easily be avoided by spending responsibly and paying off your balance every month. If keeping tabs on your daily expenses seems like too much of a hassle, then you’re probably not ready for a student card, let alone a regular one.

Qualifying for a student credit card

Even though being approved for your first student card is relatively easy, you must meet some eligibility requirements, though it varies by issuer. The most common are:

  • Being a U.S. citizen or resident, although a few card issuers accept international students
  • Being at least 18 years old
  • Being enrolled in college and providing some proof of enrollment
  • Having sufficient income (If you’re 21 or older, any income will do. But if you’re under 21, you’ll need to prove you have an independent income.)

The bottom line

If you’re a college student, getting your first credit card might be the next logical step in preparing for adulthood. If you don’t have a very lengthy credit history, or none at all, then a good student credit card might be just what you need. Student cards are easier to get than traditional credit cards, and great tools for students who want to start building their credit history while earning rewards in the process.

Student cards come with lower limits and higher interest rates than other types of accounts, but if used properly, the benefits can outweigh those risks over time. After graduation, you may even be able to upgrade your account to a standard credit card with higher limits and lower interest.