As a student, you are probably aware of the importance of responsible financial management especially when it comes to building a good credit score. One tool that can help you achieve this goal is a credit card. However, choosing a credit card that suits your needs can be a difficult task, with so many options available.
Our comprehensive guide on credit cards for students will provide you with all the information you need to make an informed decision. From the benefits and drawbacks of using a credit card to the eligibility criteria and the different types of credit cards, our guide covers it all.
How to Find a Good Credit Card as a Student?
Finding the right credit card as a student requires careful consideration. Here are some key factors to keep in mind.
Understand Your Needs and Goals
Take some time to assess your financial situation and determine why you need a credit card. Are you looking to build credit history? Do you want to earn rewards? Understanding your goals will help you choose a card that aligns with your needs.
Research Student Credit Cards
Look for credit cards specifically designed for students. These cards often come with student-friendly features such as low credit requirements and rewards tailored to student spending categories. Websites like NerdWallet and Bankrate provide comprehensive lists and reviews of student credit cards to help you make an informed decision.
Compare Card Terms and Fees
Carefully review the terms and fees associated with each card. Pay attention to interest rates, annual fees, and any other charges. Look for cards with low or no annual fees and favorable interest rates, especially if you plan to carry a balance.
Remember that some student cards may have higher interest rates than traditional credit cards.
Consider Rewards Programs
Some student credit cards offer rewards programs that can earn you cash back, points, or miles on your purchases. Evaluate the rewards structure and choose a card that aligns with your spending habits. If those are your primary expenses, look for cards that offer rewards in categories such as dining, groceries, or gas.
What Are the Benefits of Student Credit Cards?
Student credit cards can bring numerous benefits to those who use them responsibly. First and foremost, they can help students build credit history, which is a crucial factor in securing loans, mortgages, and other financial services in the future.
By making timely payments and keeping debt low, students can establish a positive credit score that reflects their fiscal responsibility. Student credit cards often come with rewards programs that allow users to earn points, cashback, or other perks for their purchases. This can help students save money on everyday expenses or earn discounts on things they enjoy, such as travel, dining, or entertainment.
Credit cards can provide a safety net in case of emergencies or unexpected expenses. Rather than relying on family or friends for financial help, students can use their credit cards to cover unforeseen costs without facing immediate financial strain.
However, it’s essential for students to use credit cards with caution and discipline, as overspending or carrying a high balance can lead to debt and negative credit consequences. All in all, student credit cards can be a useful tool for building credit, earning rewards, and managing finances, as long as they’re used wisely and responsibly.
What Are the Top 5 Credit Cards for Students?
When it comes to credit cards for students, several options stand out. Here are five top credit cards recommended by experts:
Discover it Student Cash Back
This card offers cash back rewards on everyday purchases and rotating quarterly bonus categories. It also provides a unique “Good Grade Reward” feature for students who maintain good grades.
Journey Student Rewards from Capital One
Designed for students with limited credit history, this card offers cash back rewards and provides an opportunity for a credit limit increase after making on-time payments for the first six months.
Citi Rewards Student Card
This card rounds up rewards on every purchase to the nearest 10 points and offers a 0% introductory APR on purchases for an initial period. It is a great option for students looking to maximize their rewards.
Bank of America Cash Rewards Credit Card for Students
This card lets you choose your preferred spending category for higher cash-back rewards. It also offers additional bonuses when you redeem your rewards into a Bank of America checking or savings account.
Deserve EDU Mastercard for Students
This card is specifically designed for international students. It offers cash-back rewards, requires no social security number, and provides other benefits tailored to the needs of international students.
Can a Student Get a Visa Credit Card?
Yes, students can get a Visa credit card. Visa is one of the most widely accepted credit card networks globally. Many credit card issuers offer student credit cards on the Visa network, providing students with the flexibility and convenience to use their cards at numerous merchants and online platforms. When exploring credit card options, check if the card is affiliated with Visa or any other major card network to ensure wider acceptance.
Making the Most of Your Student Credit Card
Once you’ve been approved for a credit card, you’re ready to get to work building credit. Here’s how to use your card to your advantage:Buy only what you can afford. It can be tempting to charge a night out with friends, for example, when you don’t have the cash on hand to cover it. But if such spending becomes a habit, it will be costly.
Pay on time and in full every month to avoid interest. Use your card to build good credit, not to spend money you don’t have. Use it for small purchases you can afford to pay back on time and in full every month to keep your card’s grace period in effect. You’ll maintain control of your budget and save money on interest.
If you can’t pay your full balance, pay more than the minimum. In circumstances when it’s not possible to pay your full balance, at least pay more than the minimum amount due. You’ll make more progress toward eliminating your debt.
Use only a portion of your available credit. Your card might have a credit limit of $1,000, but it’s not wise to use the full $1,000. Keep your balance under 30% of your limit to maintain a good credit utilization ratio and protect your score. As a student, you probably won’t get a high credit limit anyway, so use your card primarily for smaller purchases.
Be strategic with your sign-up bonus and rewards. If your student credit card offers a sign-up bonus, planning your application around upcoming expenses can help you meet the bonus requirements without additional spending. Choosing a credit card with rewards that match your spending will also prove more fruitful for your wallet.
Keep your account open if possible. If your credit card doesn’t charge an annual fee, keep it open to maintain the length of your credit history and your credit score. Closing a credit card can end up hurting the score you’ve worked to build.
Can a Student Account Have a Credit Card?
Yes, students can have a credit card associated with their student accounts. However, the eligibility criteria and requirements vary depending on the financial institution and the specific credit card.
Some banks may require students to have a certain level of income, while others may consider the student’s credit history or require a co-signer such as a parent or guardian.
It is important to contact your bank or financial institution to inquire about the specific requirements and application process for obtaining a credit card linked to your student account.
Ready To Get Your Student Card?
Navigating the world of credit cards as a student can be overwhelming, but you can make informed decisions armed with the right information and resources. Use websites like NerdWallet and Bankrate to research, compare, and find the best credit card for your needs.
Remember to use your credit card responsibly, make timely payments, and keep your credit utilization low to build a positive credit history. Doing so can lay a strong foundation for your financial future.
Student Credit Card FAQ’s
Is It Wise to Build Credit as a Student?
Building credit as a student is wise because it establishes a positive credit history early on. This can open doors to better financial opportunities in the future, such as lower interest rates on loans, higher credit limits, and easier approval for rental applications. Building credit as a student sets the foundation for a strong financial future.
Who Should Apply for a Student Credit Card?
Student credit cards are ideal for students who want to start building credit responsibly. These cards are tailored to student needs, often offering lower credit limits, lower fees, and educational resources. Students who can manage their credit card responsibly and make timely payments may benefit from the convenience and credit-building opportunities provided by a student credit card.
How Do I Compare Student Credit Cards?
When comparing student credit cards, consider factors such as interest rates, fees, credit limits, rewards, and additional perks. Look for cards with no annual fees or low fees, reasonable interest rates, and rewards or benefits that align with your spending habits and preferences. Also, consider the issuer’s reputation for customer service and the availability of tools for credit management.
How Do I Make the Most of My Student Credit Card?
To make the most of your student credit card, use it responsibly. Make timely payments, keep your credit utilization low, and avoid carrying a high balance. Take advantage of any rewards or benefits offered by the card, such as cash back or discounts on student-related expenses. Regularly review your statements and monitor your credit to track your progress and identify any discrepancies.
What Do I Do With My Student Credit Card After Graduation?
After graduation, you have a few options for your student credit card. You can continue using it as a regular credit card, making payments on time and building credit further.
Alternatively, you may consider upgrading to a different credit card that better aligns with your post-graduation financial goals and needs. Remember to handle your credit responsibly and consider closing the student credit card account if it no longer serves your needs or carries unnecessary fees.
