Any best credit cards for students is an ideal way to start building your credit history. Building good credit may not seem like a priority when you’re still in school, but if you want to finance a vehicle, buy a house or apply for the best credit card deals, you’ll need it down the line. Your credit history by best credit cards for students may have a negative effect on your work prospects and ability to rent an apartment.
You should be mindful that merely becoming a college student for best credit cards for students may not qualify you for a “student” pass. You’ll almost definitely need evidence of income, and if you have poor credit or none at all, getting accepted can be difficult. Consider a secured credit card or best credit cards for students in that situation. These cards need you as collateral to put down a cash deposit. In the event that you fail to pay your bill, the deposit covers the lender, which eliminates the possibility of issuing a card for you.
Why it’s wise to build credit as a student
When you’re still in school, building credit might not seem like an urgent priority, but the sooner you start the clock on your credit history, the better. When you want to buy a house or get a car loan, getting good credit would be important down the line, but there are also more immediate advantages. Strong credit, for example, will increase the chances of finding a job or renting an apartment.
Your credit history, detailed in your credit report and summarised by credit scores, shows how well you’ve treated borrowed money, and one of the fastest and simplest ways to establish credit is to use a credit card responsibly. Strong credit is useful in the following situations:
Other Credit Occasions for best credit cards for students
Capital borrowing. Good credit may mean the difference between acceptance and denial when applying for a credit card, car loan, personal loan, mortgage, or other loan. Furthermore, having good credit can entitle you to lower interest rates, saving you money.
Renting a flat. When you apply for a rental apartment, the landlord will review your credit score to see if you’re likely to pay your rent on time.
Configuring utilities. Commonly, utility providers review the credit background of customers. If you have low or no credit, the power provider or water utility can demand a deposit or a letter of guarantee from someone who promises to pay your bill if you can’t.
Being hired: You might need good credit to pass an employment screening, depending on your occupation. Credit checks are done by some employers, particularly for jobs that include handling other people’s money.
Starting a company: When you’re trying to build business credit, some creditors look at your personal credit score. If you want to start a company or hold the door open to the possibility open, a good credit score will help you keep interest rates down.
Who should apply for best credit cards for students?
It’s not enough by itself to be merely a college student to qualify for a student pass. Here’s what it takes you to remember.
The status of students might (or might not) matter. For application eligibility, review the card’s terms and conditions on the issuer’s website. For example, there is no specific student requirement for the Journey Student Rewards from Capital One, although the Discover it ® Student Cash Back rules state “You must be a college student.”
Federal law for student credit
Under federal law, only individuals under the age of 21 are eligible for credit cards. Issuers are forbidden from selling cards to persons under 21 unless they have evidence of independent income or a co-signer, someone who intends to be liable for the debt if the bill is not paid by the primary cardholder. Since most major credit card issuers do not accept co-signers, this can be a stumbling block.
Those aged 21 and up must also have evidence of income. They should, however, include any source of income to which they have a “fair expectation of access.”
Poor credit is a dealbreaker, typically. Student credit cards are for those who have little or no credit history. You won’t be eligible to get a student card on your own if you have poor credit due to late payments or other errors. In that case, consider a card tailored especially for people with poor credit.
Alternatives to student cards (and options for non-students)
If you’re under the age of 21 and can’t apply on your own, ask a parent to add you as an approved user on one of their credit cards. Registered user status will assist in the creation of a credit history. You’ll get a card with your name on it that you can use to make transactions, but the debt is technically your parent’s responsibility.
If you are over 21 and you still have problems qualifying: Even with a full-time income, if you lack a credit history, applying for a conventional credit card can be challenging.
Some start-up businesses have started providing credit cards to individuals with no credit or restricted credit. Alternative approaches are used by these issuers to assess applications, such as looking at wages, job status and assets rather than credit history.
Secured Credit Cards
Another excellent choice is safe credit cards. They are easier to apply for because they need a security deposit that eliminates the risk for issuers of credit cards. To build a credit history, use one, then step up to a better card. Check out our best protected credit cards here.
If you are unable to conquer all of these barriers and wish to begin building credit, you should: Some rent-reporting systems can record a fee to credit bureaus for your rent payments. It can be more economical than coming up with a secured credit card deposit. Being able to show a successful payment history can also assist you in the future to apply for a credit card.
Consider skipping student cards entirely if you’ve already built credit and have a steady stream of income. A credit card that provides better rewards, a generous sign-up bonus or lower interest might qualify for you. If you don’t yet meet the requirements for these cards, you can expect to get them once you’ve established good credit.
How to compare best credit cards for students
Student credit cards don’t necessarily come with the same rewards and benefits as traditional credit cards. That’s fine; the purpose of student cards is to create credit so that you can apply for better cards later on. A good student credit card will save you money and report to all three credit bureaus (more on that below); bonus points are just icing on the cake.
All three credit bureaus can report on the student credit card you choose: TransUnion, Experian and Equifax. The data used to determine credit scores is obtained by these firms. That’s why you want all of them to have your good payment history registered. With the exception of the Deserve® EDU Mastercard for Students, which says it reports to Experian and TransUnion, all of our suggested student cards report to all three bureaus.
When you’re on a student budget, avoiding an annual fee is perfect. A non-annual-fee card makes it easier to keep an account open as you generate enough credit to move on to better credit cards, in addition to keeping costs down. You can keep your original credit card open without paying an annual fee to expand your credit history and boost your credit score.
INTRODUCTORY AND ONGOING INTEREST RATES
Since cards intended for people who are new to credit have higher interest rates, it’s better to pay your bill in full each month to avoid paying interest. Some student cards, however, give you an introductory 0 percent interest period, which can be useful if you have a large purchase that you will take a few months to pay off.
Look for a card that provides a reward rate of at least 1% if you’re looking to earn points or cash back for your spending. Some student credit cards are more generous, but for a starter card, 1% is a fair rate. When you pick a card whose rewards match with your spending, you’ll get more value. A sign-up bonus is also available on some cards. Such benefits can theoretically defray the cost of your college costs, but only if you don’t spend too much to earn them. If you do plan to get a student credit card with rewards, just use it for transactions that are already within your budget.
FOREIGN TRANSACTION FEES
Surcharges on transactions made outside the world, typically ranging from 1% to 3% of the total transaction amount, are known as international transaction fees. If you’re spending a full semester in a study abroad programme, this can be a huge financial burden. Look for a student credit card that does not incur international transaction fees if you intend to fly outside the U.S.. Some issuers don’t charge these fees on any of their cards, like Discover and Capital One.
Another thing to think about while studying abroad is how convenient it would be to use your credit card. Worldwide, Visa and Mastercard are widely accepted, but less so are American Express and especially Discover.
SECURITY DEPOSIT (FOR SECURED CARDS)
Consider a protected card if you’re having a tough time applying for a student credit card. A security deposit, which is typically equal to your credit limit, is required for these cards. Minimum criteria for deposits appear to range from $200 to $300, but some can be as large as $500. On a student budget, putting together the deposit may be challenging, so you might need to save up or apply for assistance. When you close your account in good standing or move to a “normal” credit card from the same issuer, you get your deposit back.
Making the most of your student credit card
You’re able to get to work building credit once you’ve been approved for a credit card. Here’s how to make the most of your card:
Just buy what you can afford. For example, if you don’t have the money on hand to cover it, it can be tempting to pay for a night out with friends. However, if this form of spending becomes habitual, it will be expensive.
Pay every month on time and in full to prevent interest. Using your credit card to create good credit rather than to spend money you don’t have. To keep your card’s grace period in place, use it for small transactions that you can afford to pay back on time and in full each month. You’ll keep track of your expenses and save money on interest.
Tips for a student to pay back
Pay more than the minimum if you can’t pay the whole balance. If paying the entire balance isn’t feasible, at the very least pay more than the minimum sum due. You’ll be able to make more strides in paying off your loans.
Just use a portion of your credit cap. There could be a credit limit of, say, $1,000 on your card, but it’s not prudent to use the entire $1,000. To maintain a good credit utilisation ratio and protect your ranking, keep your balance under 30 per cent of your cap. You will definitely not get a high credit limit as a student anyway, so use your card only for smaller transactions.
For your sign-up incentive and incentives, be strategic. If your student credit card comes with a sign-up incentive, structuring your application around upcoming expenses will help you fulfil the bonus criteria without having to spend more money. It would also prove more fruitful for your wallet to select a credit card with rewards that fit your spending.
If at all possible, keep your account open. Leave it open to retain the length of your credit history and your credit score if your credit card doesn’t charge an annual fee. The score you’ve worked hard to create can end up hurting when you close a credit card.
What to do with your student credit card after graduation
You are more likely to be accepted for standard, non-student credit cards with richer rewards and enhanced features once you raise your credit score into the good-to-excellent range. Consider your choices for your student credit card after you graduate and start working (or move on to graduate school):
Try to use it. In certain situations, even after you graduate, you will hang onto your student id. There’s no risk in holding the account open and continuing to use it if there is no annual charge on the card. A different card, on the other hand, could give better incentives or a lower interest rate.
Upgrading it. Inquire with your issuer about moving your account to a different card via a so-called product update. Doing so makes it easier for you to switch to a card that fits your needs better while keeping the account open. This helps to retain the length of your credit history, which is good for your credit score.
Low key credit replacement methods
Substitute it. If you pay an annual fee on a student card that you do not want to continue using, and you will not be upgraded by the issuer, you are probably better off applying for a better card and closing the student card account (once approved).
Keep it—but in a drawer. If you can’t (or don’t want to) update the card but don’t want to pay an annual charge, it’s a good idea to leave the account open when applying for other cards. It will help your credit score. Using a simple “autopay and daily” plan to keep your account active during the year by making one — or multiple — transactions.
Simplicity and value
Rec Credit Score
Earn 2% cash back on up to $1,000 in combined transactions per quarter at gas stations and restaurants. Plus, you immediately receive unlimited 1% cash back on all other transactions.
Rewards for Good Grades: Your GPA is 3.0 or higher for up to the next 5 years for a $20 statement credit per school year.
Earn points when creating a credit history that will come in handy once you graduate. Also, get your free Credit Scorecard, which contains your FICO® Credit Score as well as key information that relate to your score’s calculation.
No yearly tax. No late payment fines on the first late payment. There will be no change in the APR if you pay late.
Refer a Friend: Once you’ve signed up for a Discover it® Student card, you will receive a $50 statement credit for each friend you refer who is accepted. About half a million students received Discover Cards through the reviews of their peers.
For your account, the Freeze It ® on/off switch stops fresh transactions, cash advances and balance transfers in seconds.
Get a warning on any of the thousands of Dark Web pages if we find your Social Security number.
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99 percent of the locations that earn credit cards accept Discover nationally.
Purchases have a 0% intro APR for 6 months, during which the regular variable purchase APR ranges from 12.99 percent to 21.99 percent.
At restaurants and gas stations, you receive 2 per cent cash back on up to $1,000 in combined sales per year, and 1 per cent cash back on all other purchases. (Unlike Discover’s other student card, your bonus incentives do not have to be “activated”.) The annual fee is zero dollars. Students with a 3.0 GPA or higher will receive a $20 statement credit per year for up to five years if they maintain a 3.0 GPA. For new cardholders, Explore provides a signature bonus.
Discover is not as commonly known abroad as other cards, even though there is no international transaction fee. Make sure that you have a contingency plan if you plan on travelling abroad.
Why Do We Love It?
For college learners, Explore offers two fine cards. With its no-maintenance rewards framework and student-friendly incentive categories, the Discover it ® Student chrome shines. With the first late payment, you also get a free FICO score, low fees, and forgiveness. Furthermore, Discover claims that this card does not require a FICO ranking.
Bonus category cash-back rewards
No credit history and international students
Flat-rate cash-back rewards
Rec Credit Score
Earn $5 a month on Select Video Subscriptions for 12 months when you pay on time. Exclusions of * Applicate
No annual charge and no penalties for overseas transactions
With the careful use of a card like this, you can help build up your credit.
Choose the most suitable monthly due date for you.
For a higher credit line in as little as 6 months, be immediately considered
$0 responsibility for fraud if your card is either lost or stolen.
Using the CreditWise® app to track your credit profile, free for all,
The incentives are simple to comprehend and can assist in the creation of good credit habits. For all transactions, you gain 1 percent cash back; you’ll get an additional 0.25 percent cash back as a bonus when you pay the bill on time. New cardholders will get up to $60 in streaming media credits. And in as little as six months, you will be automatically considered for a higher credit limit without additional deposit. There is no annual charge and no international transaction fees.
For certain other student cards, the overall incentive rate of 1 percent or 1.25 percent is lower than the top rate.
Why Do We Love It?
Capital One’s Journey Student Rewards give straightforward rewards, including a bonus for paying on time. You don’t have to be a student to apply, so think about it if your credit is average.
Rec Credit Score
Unlike a prepaid card, daily reporting to the three major credit bureaus is required.
Accepted in millions of places all over the world
If you pay the necessary security deposit, you’ll be given a $200 credit line. Additionally, deposit more money before your account is opened to obtain a wider credit line.
To make your $49, $99, or $200 refundable security deposit, you’ll need access to an approved bank account.
In as little as 6 months, you will be automatically considered for a higher credit line with no additional deposit necessary.
We can monitor your account and you will be able to gain your deposit back as a statement credit when you use it wisely by doing things like making on-time payments.
Easily control your account online, over the phone, or via our mobile app, 24 hours a day, 7 days a week.
This is a secured credit card, so a deposit must be placed down. But with just a $49, $99 or $200 deposit, you could be able to get a $200 line of credit. In as little as six months, you will also be automatically eligible for a higher credit limit with no extra deposit. The annual fee is zero dollars.
While secured credit cards are easier to obtain than unsecured credit cards, approval is not guaranteed. You’ll have to prove that you can pay your bills, and you’ll have to put money down as a security deposit.
Why Do We Love It?
The Capital One Protected Mastercard® is a perfect first credit card for someone who is just getting started with credit.