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How to find a student credit card that makes the grade
Despite sometimes taking on the label of a “junior card,” many student cards are just as useful and valuable as general rewards cards. With benefits tailored to credit-building needs, these cards are a great way for students to establish themselves financially. Plus, you can shop for anything new you may need for at-home and hybrid classes, like digital textbooks, a laptop upgrade or a comfier desk chair.
Check out our top picks for student credit cards and learn more about making your entry into the world of credit. Then get ready to choose the card that you’ll carry with you through 2021, and possibly beyond.
A quick comparison of top student credit cards
A closer look at the best credit cards for students
Discover it® Student Cash Back
This student card can produce an extremely lucrative first year of cash back for savvy spenders. Earn 5% cash back in rotating categories each quarter, such as gas stations, grocery stores and restaurants, up to the quarterly maximum of $1,500 each time you activate, then 1%. Earn 1% unlimited cash back on all other purchases. There’s no annual fee and a $20 reward statement credit for each year you maintain a 3.0 GPA or higher for up to the next 5 years. Maxing out the quarterly bonuses before the rewards rate drops from 5% to 1% will result in $75 in rewards each quarter.
Why this card might be right for you
This card is essentially the same as the Discover it® Cash Back. But students don’t have to worry about having a credit history to be approved. And Cashback Match, where Discover will automatically match all of your cash back earnings from your first year, is a great bonus.
Read the full review and apply on Discover’s secure website.
Petal® 2 “Cash Back, No Fees” Visa® Credit Card
The Petal 2 card is designed for those who want to manage their credit card transactions and history all in one simple, easy-to-use app. The fintech company tailors the card to those with little or no credit. In fact, you don’t have to have a credit history to apply, but if you do, Petal 2 may use that information to assess whether you qualify. If you don’t have pre-existing credit information, Petal 2 will draw from your bank accounts and other financial records to get a more holistic picture of your financial health. You won’t have to worry about an annual fee or a late payment fee with the Petal 2 card, but your APR could potentially be high, depending on your qualifications (12.99% – 26.99% variable).
Why this card might be right for you
Students looking for a practical credit card to build credit can rest easy knowing not only that the Petal 2 card’s barrier to entry is relatively low, but that it also offers a modest amount of cash back rewards. You’ll get 1% cash back on eligible purchases made with your card, and if you make 12 on-time monthly payments, Petal 2 will bump this rate up to 1.5%.
Read the full review and apply on WebBank’s secure website.
Discover it® Student chrome
Discover’s chrome card for students earns 2% cash back on up to $1,000 in purchases at gas stations and restaurants per quarter. For everything else, you’ll earn 1%. If you’re a student looking to build credit, the roughly $20 in rewards you earn every quarter will be a pleasant surprise you can count on for as long as you’re using the card (and reaching the spend cap of $1,000 per quarter).
Why this card might be right for you
Similar to the Discover it Student Cash Back, this card is essentially identical to the Discover it® chrome, only you receive a good grades reward that stretches up to 5 years. And your cash back earnings will automatically be matched at the end of your first year with the card.
Read the full review and apply on Discover’s secure website.
Deserve® EDU Mastercard for Students
Students with little to no credit history often face barriers to entry when trying to get a starter credit card. This card, however, uses a proprietary algorithm to gauge your financial health by looking at your bank account and other factors. If you’re into online shopping, take note of the Amazon Student Prime offer – you’ll receive one year of Amazon Prime Student after spending $500 in first 3 billing cycles ($59 lifetime value).
Why this card might be right for you
The Deserve EDU Mastercard doesn’t require international students to have a Social Security Number to apply for the card. No annual fee, 1% cash back and the Amazon Student Prime offer help make this a great card for students in general.
Read the full review and apply on Deserve’s secure website.
Journey Student Rewards from Capital One
The Journey card has no annual fee and offers 1% cash back on all purchases, but you can boost that to 1.25% if you pay your bill off on time. You can also use Eno®, your Capital One® assistant, to manage your account via text, receive alerts, and shop safer online.
Why this card might be right for you
Paying no foreign transaction fees on this card really sets it apart for student value. Take it abroad and pay your bill in full every month to practice good habits. You will automatically be considered for a higher credit limit in as little as 6 months.
Read the full review and apply on Capital One’s secure website.
Petal® 1 “No Annual Fee” Visa® Credit Card
The Petal 1 card adds a little bit of fun to the cash back game. Check the Petal 1 mobile app for local offers near you that earn between 2% and 10% cash back at select merchants.
Why this card might be right for you
The unique cash back offers are a nice bonus, but perhaps more valuable to a credit novice are this card’s credit-building features. Using Petal 1’s user-friendly app, you can set and track a monthly budget, keep tabs on your credit score and calculate interest costs. Through the app you can also enable AutoPay and make sure you never miss a payment. If your focus is building healthy credit habits, this card makes it easy.
Read the full review and apply on WebBank’s secure website.
What are student credit cards and how do they work?
A student credit card works essentially like any other type of card. A credit card provides you with a line of credit. When you use it, 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. Credit card issuers may allow you to make small minimum payments and carry the rest of the balance month-to-month, but it comes with a tradeoff. When you carry a balance, you’ll have to pay interest (measured by annual percentage rate, or APR) on the total amount.
A student credit card has a lot in common with other types of cards, except for a few factors that make them better suited for younger consumers:
Less strict credit requirements
If you’re in high school, college or graduate school, you probably don’t have a long, extensive credit history or a high credit score. More relaxed strict credit requirements make student credit cards easier to qualify for.
Lower cost of ownership
A student is less likely to have the same amount of income and overall wealth as someone who’s been in the workforce for years and buying houses, cars and other property. Lower annual fees (sometimes even zero annual fees) make student credit cards less expensive to own and use.
Specialized benefits
The typical college freshman probably has little use for a credit card that offers a welcome bonus of 50,000 airline miles. On the other hand, the Discover it® Student Cash Back offers a yearly $20 statement credit for each year you maintain a 3.0 GPA, for up to five years.
CardSmart: Credit-building for college students and young adults
A woman named Chantal recently emailed with a question about her son, a college student looking for a card that can help him build credit history.
My son is a senior in college and has never had a credit card. He has used cash and just a regular debit card for all purchases. In your opinion, what is the best credit card that will build a bit of good credit for him? He does not travel much, but he does eat out and buys gas/groceries. He has a few utility bills that he shares with his roommates.
Based on Chantal’s description of her son’s credit history and spending habits, I suggested a few cards that don’t require a credit history to apply:
- Deserve EDU Mastercard for Students — Earns 1 percent cash back on eligible purchases
- Discover it Student chrome — Earns 2 percent cash back at gas stations and restaurants on up to $1,000 in combined purchases each quarter, along with unlimited 1 percent back on all other purchases
- Jasper Cash Back Mastercard® — Credit limit of up to $5,000
- Secured Mastercard® from Capital One— A security deposit is required: Capital One will monitor your account, and as you use it responsibly by doing things like making on-time payments, you may be able to earn back your deposit as a statement credit.
I also shared some good news for her son (and young adults in general) on the credit-building front: Credit-scoring products like UltraFICO and Experian Boost pay attention to good credit habits such as paying cellphone and utility bills on time, or maintaining a savings account with a positive balance, instead of being focused primarily on car loans, mortgages and other big credit accounts.
A lot of credit cards for people with no credit history or limited credit history report to the three major credit monitoring bureaus, so every on-time payment sends a signal to potential lenders you’re a trustworthy user of credit. Those good habits will help you build a solid credit history over time and put you in a strong position for bigger credit accounts in the future.
If you have questions about credit-building, credit cards or personal finance in general, please email me at bbridges@bankrate.com.
Why get a student credit card?
If you’re unfamiliar with carrying your own credit card, choosing a student option is a great way to get started. As well as letting you spend conveniently, student cards will give you the opportunity to establish a credit score while learning how to manage an account. More advanced cards may take some experience to fully reap the benefits, almost like a test… You may be prepared, but it might be best to study the lesson before the exam.
Financial independence
Some people start out using their parent’s cards as an authorized user to help them ease into the credit world and kickstart a credit history. However, that’s not an option for everyone.
Getting your own student credit card allows you to take a step toward financial independence. If you don’t have the resources to cover all your expenses up-front with cash, a student credit card offers the convenience of buying the things you need now and repaying your credit card issuer before the next billing cycle.
Paying necessary expenses
Establishing your credit doesn’t mean you have to be a big spender. You can start with linking your card to your rent or internet bill, or buying books for next semester.
According to a 2019 Wells Fargo study, college students spend $246 per week on average across housing, food, transit, entertainment, etc. These expenses can be paid with your student card, and you’ll have the opportunity to go online and track your spending.
Developing good financial habits
Used responsibly, a student credit card can help you develop good habits that will come in handy later in life. Setting a routine of being on time with payments and budgeting within your means will lead you to success. Paying your balances and managing your account will be good practice for the years ahead when your financial obligations could include everything from car payments to mortgages to retirement accounts.
In case of emergency
In addition, a credit card can be a great resource in an emergency. If your car breaks down, if you need a hotel room after your flight gets canceled or if you get a big bill after a trip to urgent care, your student card can provide a much-needed cushion. As always, make sure to pay your bill in full before you begin incurring interest.
Credit card basics: Terms students should know
- Annual fees: Some credit cards have annual fees of $50 or more, though most student cards don’t. Be sure to check the fees before applying for any card.
- Annual Percentage Rate (APR): Interest rate paid on balances carried from one billing period (month) to the next.
- Credit bureau: Research entities that compile all of your credit history reporting to generate your credit score. In the U.S., there are 3 major bureaus — Equifax, Experian, and TransUnion.
- Credit utilization ratio: This ratio 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 ratio is at 10%. The lower your credit utilization, the better. If you use up a large chunk (or all) of your available credit every month, your credit score may decrease.
- FICO: The entity that creates the scoring model used to calculate credit scores. FICO credit scores range from 300 to 850. Credit scores are one factor in determining your creditworthiness.
- 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 several consecutive on-time payments.
If you run into a term that’s not on this list, don’t worry. Look for it in Bankrate’s personal finance glossary.
How students can avoid credit card debt
Learning experiences can be painful, especially when they involve learning how bad decisions can hurt your personal finances. Here’s a list of four tips for staying out of debt trouble with credit cards:
- Choose the right card for your finances and lifestyle. If you don’t own a car and you rarely dine out, it’s not a good idea to apply for a rewards card that offers cash back on gas and dining purchases.
- Pay off your balance in full every month. It may seem obvious, but the only way to avoid paying more than you have to is by paying in full every month. Make sure you note when your credit card bill is due and stick to your payment schedule.
- Use caution when paying tuition with your credit card. It’s best to not use your credit card to pay for tuition, but some schools will allow you to do it. However, be aware that you may be charged a convenience fee.
- Use your card for everyday convenience. Use your card to pay for food, utility bills, movie tickets, and other small purchases. Having a credit card is incredibly convenient and a positive thing when you use it properly.
How to apply for a student credit card
If you’re ready to start shopping, consider these three essential steps:
1. Consider your credit history
Start by answering the following questions:
- Have you ever had a credit card?
- Have you ever taken out a loan?
- Do you have a steady work/income history?
If you’ve 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 become an authorized user on a pre-existing account.
2. Check your credit score and credit report
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. Also, request copies of your credit report, which you can do for free once a year from each of the three credit bureaus.
3. Look for the magic word: ‘Pre-qualified’
Before you fill out the first blank field on any application, be sure to look for pre-qualified offers.
To see if you pre-qualify, a credit card issuer will perform what’s known as a “soft” credit inquiry. This way, you can find measure how likely you are to be approved for the card before you actually apply and the issuer performs a “hard” credit inquiry that will ding your credit score.
Every time you apply for a credit card, your score will briefly drop by about 5 points, so it’s best to do it as few times as possible. If you’re denied, take steps to improve your credit (pay down other cards, loans, etc.) and apply for another card in a few months.
Frequently asked questions about student credit cards
Can international students apply for a credit card?
Applying for a credit card as an international student can be an intimidating process. It is very common in the application process to have to provide a Social Security number, which can be a limiting factor for international students. The good news is that there are options available for students that wish to build credit. The Deserve® EDU Mastercard for Students offers an innovative application process that doesn’t require international students to have a Social Security number.
Can student credit cards improve or build credit?
Building credit history is one of the most important financial decisions a person can make, and the earlier you can start building credit, the better. Student cards, when used responsibly, can be a very effective way to start building or improving your credit. A major perk of a student credit card are the credit requirements. Student cards are geared toward people who have limited or no credit history, making them easier to qualify for. Plus, student cards can offer lucrative rewards and benefits, like cash back and specialized bonuses that are tailored to college students.
What is the average credit card debt per student?
According to CreditCards.com, the average balance of a college students credit card for the most recent month in 2019 was $1,423. While this average debt can see high, don’t let it dissuade you from applying for a credit card. There are steps you can take to not let credit card debt rack up, like paying all of your bills on time (or even early), not opening too many new credit cards at once, using your credit card regularly (for smaller purchases you’re sure you can pay off) and actively monitoring your credit score.
How we chose our top picks for student credit cards
Credit cards reviewed by Bankrate receive scores based on a unique 5-star rating system. Our evaluation of best student credit cards focuses closely on specific qualities and benefits including:
Credit requirements
The typical person shopping for a student credit card might not have excellent credit or even much credit history at all. Most of the cards on our list are open to new-credit, fair-credit or limited-credit applicants.
Fees
If you don’t yet have a full-time career, obviously you would be better served by a credit card that goes easy on the fees and charges. Annual fees, foreign transaction fees and other charges make the card more expensive to own, especially if it doesn’t have a rewards program that helps offset those costs.
Rewards
Some of our top student credit cards have rewards programs that earn cash back for gas, groceries and other everyday purchases. Rewards offer a surefire way to get more value from your card.
Additional reviews and research
Need to do more studying before you make a decision? No worries. Choosing the right credit card as a college student is a big deal. Check out these resources from Bankrate.
Learn more:Easiest credit cards to get in 2021
Senior Editor Barry Bridges has been writing about credit cards, loans, mortgages and other personal finance products for Bankrate since 2018. His work has also appeared on websites including Nasdaq.com, Zillow.com and The Simple Dollar. He was previously an award-winning newspaper journalist in his native North Carolina. Send your questions about credit cards (and fantasy baseball) to bbridges@bankrate.com.
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