How to Choose The Best Student Credit Card
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Student credit cards are designed for college students or university students to help them build credit history responsibly. They typically offer lower credit limits and simpler requirements to accommodate students' limited credit history and income. These cards often come with educational resources on financial management and help earn rewards or discounts tailored to students. Whether you use the card to pay for streaming services, at grocery stores or at Amazon, you need to be careful whenever you spend money.
By using a student credit card responsibly, such as paying off the balance in full each month, cardholders can start building a positive credit history, which can be advantageous for future financial needs.
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Features of student credit cards
Student credit cards come with a variety of features designed to support young adults in building their credit history while managing their personal finances. Here’s a closer look at each feature:
Lower credit limits. Student credit cards usually have lower credit limits compared to standard cards. This is intended to help students avoid accumulating excessive debt and to reduce the risk for issuers, as students may have limited financial experience.
No annual fees. Many student credit cards do not charge an annual fee, which helps make them more accessible and affordable for students who may have limited budgets.
Rewards and cash back. Some cards offer rewards programs or cash back on certain types of purchases. It includes cash back rewards on everyday expenses, or discounts on student-related items such as textbooks or electronics. This feature can be motivating and provide tangible benefits for responsible card use.
Educational resources. Student credit cards often include access to resources and tools that teach financial literacy. These might include online educational materials, budgeting tools, and tips for managing credit. This guidance helps students understand the importance of maintaining a good credit score and managing their finances responsibly.
Flexible approval criteria. Credit card issuers recognize that students may have limited credit histories and lower incomes, so they typically have more lenient approval requirements. This makes it easier for students to qualify for a card and start building their credit.
Building credit. By using a student credit card responsibly—such as making monthly payments on time, keeping balances low, and avoiding maxing out the credit limit—students can establish and build a positive credit history using their first credit card. This can benefit them in the future when applying for student loans, renting an apartment, or making other financial transactions.
Additional benefits. Some student credit cards come with additional perks like travel insurance, purchase protection, or extended warranties on items bought with the card. These benefits can provide added value and security for students who use their cards responsibly.
Using Self's Credit Builder Account can get you an average credit score bump of 49 points.
- No hard pull
- Automate payments
- Track your credit score
- Reports to all 3 bureaus
- Cancel anytime
Choosing the best student credit card
Evaluate fees
Look for cards that do not charge an annual fee, as this can save you money over time. Some student cards may charge an annual fee, which can be a burden on a tight budget. If you plan to travel abroad or make purchases from international websites, choose a card with no foreign transaction fees to avoid extra charges.
Consider rewards
Cards offering cash back on everyday purchases, like groceries or dining, can provide immediate financial benefits. Check the percentage of cash back offered and any categories where it applies. Some cards offer points or miles for travel-related expenses. If you travel frequently, a rewards card that earns rewards for travel might be beneficial.
Check interest rates
The Annual Percentage Rate (APR) represents the cost of borrowing on the card. A lower APR is advantageous if you occasionally carry a balance, but ideally, you should aim to pay off your balance in full each month to avoid interest charges.
Review educational resources
Many student credit cards offer access to educational resources that teach about credit scores, budgeting, and financial planning. These tools can help you understand how to use credit responsibly and build a good credit history. Some cards provide online tools or mobile apps to help track spending habits and manage your budget effectively.
Look for introductory offers
Some cards offer a bonus reward for meeting a minimum spending requirement within the first few months. This can be a valuable incentive if it fits your spending patterns. Credit card offers may include a 0% introductory APR on purchases or zero balance transfer fees for an introductory period. This can help you save on interest if you need to carry a balance temporarily or transfer existing debt.
Assess customer service
Research customer reviews and ratings for the card issuer’s customer service. Good customer support can be crucial if you face issues such as lost cards, fraudulent charges, or credit card account questions. Check if the issuer offers multiple ways to contact customer service, such as phone, chat, or email, and if they provide prompt assistance.
Examine credit limit
Ensure the available credit limit offered is appropriate for your spending needs. A limit that’s too low may be restrictive, while a higher limit might tempt overspending. Look for a card that balances these factors based on your financial habits.
Check for additional benefits
Some cards offer protection for purchases against damage or theft, which can be valuable if you make significant purchases with your card. Benefits like travel insurance or rental car insurance can be useful if you travel often. These perks add extra value to the card.
Read the fine print
Thoroughly review the card’s terms and conditions, including fees, interest rates, and rewards program details. Understanding these aspects helps you avoid unexpected costs and make an informed decision.
Using Self's Credit Builder Account can get you an average credit score bump of 49 points.
- No hard pull
- Automate payments
- Track your credit score
- Reports to all 3 bureaus
- Cancel anytime
Pros and cons
Pros
- Credit building. They help students build a credit history, which is beneficial for future financial endeavors like loans or renting an apartment.
- Educational resources. Many cards offer financial literacy resources, which can help students learn about budgeting, credit scores, and responsible credit utilization.
- Rewards and benefits. Some student cards provide rewards like cash back on purchases, discounts on student-related expenses, or other perks, which can be advantageous.
- Lower fees. Many student credit cards have no annual fees and low foreign transaction fees, making them more cost-effective for students.
- Flexible approval. They often have more lenient approval criteria, making it easier for students to qualify, even with limited credit history or low independent income.
Cons
- Higher interest rates. They may have higher variable APRs compared to other credit cards, which can result in more expensive interest charges if you carry a balance.
- Lower credit limits. Credit limits are typically lower, which can be restrictive and may not cover larger purchases or emergencies.
- Potential for debt. If not managed responsibly, even a small credit limit can lead to credit card debt accumulation, especially if students are tempted to overspend.
- Limited rewards. The rewards and benefits may not be as extensive or lucrative as those offered by cards designed for more experienced users.
- Fees for late payments. Late payment fees can add up if the balance is not paid on time, and missed payments can negatively impact your credit score.
Traditional Credit Cards vs. Student Credit Cards
Eligibility requirements
Traditional credit cards generally require a more established credit history, higher credit scores, and sometimes higher income levels. Applicants must demonstrate financial stability and creditworthiness whereas student credit cards are designed for individuals with limited or no credit history, such as college students. Approval requirements are less stringent, focusing more on factors like income from part-time jobs and student status.
Credit limits
A traditional credit card will usually offer higher credit limits, which can range from a few thousand dollars to tens of thousands, depending on the applicant's credit profile and income. Student credit cards typically feature lower credit limits, often between $500 and $1,000, to help manage spending and reduce the risk of significant debt.
Fees
Traditional credit cards may have various fees, including annual fees, late fees, and foreign transaction fees. The cost structure varies depending on the card issuer and type of card. On the other hand, student credit cards often come with no annual fees and may have lower late payment fees. The cost structure is designed to be more affordable for students who are likely on a tight budget.
Interest rates
Traditional credit cards typically have higher APRs (Annual Percentage Rates) compared to student credit cards, especially for those with less favorable credit histories. Interest rates can vary widely based on the card and the applicant's creditworthiness. Student credit cards offer lower or intro APRs to make it easier for students to manage balances and pay off debt. Some may have promotional rewards rates for new cardholders.
Rewards and benefits
You get to enjoy a wide range of rewards programs, including cashback, points, travel rewards, and exclusive benefits such as access to airport lounges or concierge services with a traditional credit card. The rewards and benefits vary based on the card type. With a student credit card, you will get basic rewards such as cashback on specific categories or points for purchases, but typically have fewer perks compared to traditional credit cards. The focus is often on helping students build credit rather than offering extensive rewards.
Educational resources
Traditional credit cards nay not offer specialized educational resources or tools. Cardholders are generally expected to manage their finances independently or seek outside advice. Student credit cards often provide educational resources and tools to help new credit users understand credit management, budgeting, and responsible use. This support is aimed at helping students learn how to manage credit effectively.
Fraud protection
Traditional credit cards generally offer robust fraud protection features, including zero liability for unauthorized transactions, but the specifics can vary by issuer and card type. Student credit cards also include fraud protection features, often with similar zero liability policies for unauthorized charges, ensuring that students are protected against fraud.
Building credit
Traditional credit cards are used by individuals with established credit histories to maintain or improve their credit scores. Responsible use contributes to a strong credit profile. Student credit cards are primarily intended to help students start building their credit history. Responsible use is crucial for establishing a positive credit record early on.
Using a student credit card responsibly can have a significant impact on your credit score, as reported to the major credit bureaus—Equifax, Experian, and TransUnion. On-time payments, low credit utilization, and a positive credit history contribute to a higher credit score, which is tracked and recorded by these bureaus.
On the other hand, missed payment history, high credit utilization, or accumulated debt can negatively affect your credit score and be reported to the bureaus, potentially damaging your credit profile. Regularly monitoring your credit report from these bureaus can help ensure accuracy and track your progress in building a strong credit history.
Using Self's Credit Builder Account can get you an average credit score bump of 49 points.
- No hard pull
- Automate payments
- Track your credit score
- Reports to all 3 bureaus
- Cancel anytime
Top student credit cards
The best student cards typically offer a combination of low fees, rewards, educational resources, and favorable terms. While the "best" card can vary depending on individual needs, here are some highly regarded options:
Chase Freedom Student Credit Card
With a Chase Freedom Student Credit Card, you earn 1% cash back on every purchase. Rotating categories offer 5% cash back on up to $1,500 spent each quarter, after activation. There is no charge for owning the card and you get access to Chase’s extensive customer service network and tools.
- Best for. Students looking to earn cash back on everyday purchases and take advantage of rotating categories for higher rewards.
Discover it® Student Cash Back
A Discover it Student Cash Back card will give you 5% cash back on rotating categories each quarter (up to $1,500 per quarter, after activation), and 1% on all other purchases. It features a first-year match where Discover matches all the cash back earned by the end of your first year. It has no annual fee and includes tools for managing spending and tracking credit.
- Best for. Students who want high cash back rates and a potential boost from the first-year cash back match.
Capital One Quicksilver Student Cash Rewards Credit Card
You get to earn 1.5% cash back on every purchase with the Capital One Student Cash Rewards Credit Card. It has no annual cost and no foreign transaction fees. It is ideal for students with fair credit and helps build a credit history.
- Best for. Students who want a straightforward cash back card with a flat rate on all purchases.
The Bank of America Travel Rewards Credit Card for Students
The Travel Rewards Credit Card for Student from the Bank of America earns you 1.5 points per dollar on all purchases, 3 points per dollar on travel and dining purchases. It has no annual fees and no foreign transaction fees. Points can be redeemed for travel expenses, which is ideal for students who travel or dine out often.
- Best for. Students who want to earn travel rewards and avoid foreign transaction fees.
FAQs
Are there any fees associated with student credit cards?
Some student credit cards may have fees such as annual fees, late payment fees, or foreign transaction fees. Look for cards with minimal fees to keep costs low.
Can I use a student credit card abroad?
Yes, many student credit cards can be used internationally. However, check if the card has foreign transaction fees and consider a card with no such fees if you plan to travel abroad.
What should I do if I lose my student credit card?
If your card is lost or stolen, contact your card issuer immediately to report it and request a replacement. The issuer will typically cancel the lost card and issue a new one to prevent unauthorized transactions.
The bottom line
When choosing the best student credit card the trick is to find one that aligns with your financial habits and goals while offering favorable terms. Look for a card with no annual fee, a manageable APR, and rewards or benefits that match your spending patterns.
Prioritize cards that provide educational resources to help you build credit responsibly. Avoid cards with high fees or complex terms that could lead to unnecessary costs. Ultimately, a good student credit card will help you start building a positive credit history while providing value and support as you manage your finances.
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