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Should you skip the student credit card? Options for building credit in college

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If you’re a college student looking to apply for your first credit card, you may be wondering, “Which option is right for me?”

Maybe you already have some credit history due to student loans, or perhaps a credit card will be your first tool for establishing it. As a college student, a student credit card may seem like the most reasonable choice, but there are a few additional options you can realistically qualify for, earn rewards with and build credit by using.

Pros and cons of student credit cards

First and foremost, student credit cards are usually easier for college students to obtain compared to more premium rewards cards. Typically, student cards don’t require a high credit score or any credit at all. Both the Discover it® Student chrome and Discover it® Student Cash Back, for example, are marketed as student card options that don’t require a credit history.

Student cards can, though, come with higher interest rates compared to your average rewards card. The Journey Student Rewards from Capital One, for example, carries a variable interest rate of 26.99 percent.

Interest rates won’t affect you unless you carry a balance month-to-month. Even if you count yourself as responsible with money, it’s best to prepare for the worst-case scenario; if you end up in credit card debt, a high interest rate will only make it worse.

The credit limit you’re approved for may be on the lower side with a student card — which can limit the potential of your credit score — but this isn’t necessarily a bad thing and can help keep your spending within a reasonable range.

Want more options? Consider a starter card

If you’ve looked through student credit card options and nothing is calling your name, you might consider credit cards for those with no credit history.

There are a few solid choices out there, but the Petal® 2 “Cash Back, No Fees” Visa® Credit Card really takes the cake when it comes to rewards potential and tools offered to build healthy financial habits. The Petal 2 card is a fee-free credit card, meaning it doesn’t charge an annual fee, late payment fees, foreign transaction fees for spending abroad and more.

The crowning feature of the Petal 2 card is its rewards structure — as you make on-time monthly payments, your rewards rate increases. To start, you earn 1 percent cash back on eligible purchases. After six on-time monthly payments, your 1 percent cash back rate increases to 1.25 percent. Finally, after 12 on-time payments, you receive 1.5 percent cash back on eligible purchase.

Within the Petal 2 Mobile App, you can track your Experian credit score and compare spending with the card to your monthly budget. Additionally, the app allows you to view your cash back status based on how many on-time payments you’ve made.

Become an authorized user

Should you decide you’re not quite ready to take the plunge (i.e., apply for your own credit card), consider becoming an authorized user on a parent or guardian’s card.

As an authorized user, you aren’t responsible for the monthly bill payment but share the same credit line as the primary cardholder. Most notably, you don’t need a credit history to become an authorized user, making it the perfect option for students interested in building credit.

The bottom line

Whether or not a student card is right for you depends on a few factors, from personal accountability and spending habits to basic preferences in rewards structures and perks.

When it’s all said and done, as long as you choose a card with rewards relevant to your lifestyle, low or no fees and sensible interest rates, you’ll be just fine.

Written by
Claire Dickey
Editor, Product
Claire Dickey is a product editor for Bankrate, and To Her Credit. Before joining Bankrate, Claire worked as a copywriter for brands within the telecommunications industry as well as a hybrid marketing and content writer.