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How To Choose a Student Credit Card

How To Choose a Student Credit Card

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This article was last updated Jun 29, 2020. Terms and conditions may have changed. For the most accurate information, please consult the issuer website.

If you’re a student looking to establish or build your credit history, one of the easiest ways to do so is by opening a student credit card and using it responsibly. This means paying your bill on time each month and keeping your balance well under your credit limit.

In addition to reporting your payment history with the card to the three major credit bureaus (Equifax, Experian and TransUnion), which helps build your credit score, some student credit cards also offer rewards programs and student-specific benefits, such as good grades rewards and credit limit increases over time.

We break down what you need to know about choosing a student credit card, including whether you qualify and what to look for in the card.

Do you qualify for a student credit card?

In an attempt to protect young adults and students, the CARD Act of 2009 prohibits credit card companies from granting new accounts to anyone under the age of 21 unless they can show proof of income or have an adult cosigner. The law also restricts card companies from marketing credit cards to students within 1,000 feet of college campuses via giveaways. However, once you hit 21 your income is still a consideration when you apply for a card.

See what criteria you must meet to qualify for a student credit card:

  • Be at least 18 years old and can prove some sort of income, such as regular paychecks, investment income, salary or commission checks.
  • Be a U.S. citizen or resident with a valid Social Security number.
  • Depending on the credit card, you may also need to provide proof that you are enrolled in school.

Several issuers offer prequalification tools that can tell you if you’re preapproved for a credit card by performing a soft pull of your credit – which will not negatively impact your credit score.

For example, with Discover, you can fill out an online form with basic personal information, including your name, address, date of birth, Social Security number, income and whether or not you are a student. Once the form is submitted, Discover will show you which credit card offers you are preapproved for. Just know, preapproved offers are not guaranteed, and you still need to complete the application process to receive a final approval decision.

Read: How to Check If I’m Prequalified for a Credit Card

What to look for in a student credit card

A student credit card most likely will be your first experience with a revolving line of credit. With that may come various fees, such as an annual fee and foreign transaction fees, as well as interest rates and rewards. When choosing a student credit card, here are a few key features you should look for:

No annual fee. Since finances can be tight for a lot of college students, a credit card that doesn’t charge an annual fee is ideal. And fortunately, the majority of credit cards designed specifically for students come with $0 annual fees.

Reasonable interest rates. Although we recommend paying your credit card balance in full each month to avoid interest charges, we know that’s not always possible. That’s why it’s important to be aware of your credit card’s APR – especially since student credit cards typically come with higher interest rates than traditional credit cards.

With the Journey® Student Rewards from Capital One®, for example, you will be subject to high interest charges of 26.99% (variable) APR, which will be applied to any balance you carry from month to month on the card.

The Wells Fargo Cash Back℠ College Card, on the other hand, offers a much more reasonable purchase APR that ranges from 11.15% to 21.15% variable.

If you do find the need to finance a large purchase – such as school books or a computer – and pay it off over time, there are a few student credit cards that offer a 0% introductory APR on purchases.

The Discover it® Student chrome offers an intro APR on purchases of 0% for 6 months. If you don’t pay off your balance in full within that time frame, you will incur interest charges on the remaining balance at a rate of 12.99% - 21.99% variable APR.

  • 0% for 6 months

  • 2% cash back at Gas Stations and Restaurants on up to $1,000 in combined purchases each quarter. 1% unlimited cash back on all other purchases - automatically

  • 12.99% - 21.99% Variable*

Highlights
  • INTRO OFFER: Unlimited Cashback Match – only from Discover. Discover will automatically match all the cash back you’ve earned at the end of your first year! There’s no minimum spending or maximum rewards. Just a dollar-for-dollar match.
  • Earn 2% cash back at Gas Stations and Restaurants on up to $1,000 in combined purchases each quarter. Plus, earn unlimited 1% cash back on all other purchases – automatically.
  • Good Grades Rewards: $20 statement credit each school year your GPA is 3.0 or higher for up to the next 5 years.
  • No annual fee. No late fee on first late payment. No APR change for paying late.
  • Get 100% U.S. based customer service & get your free Credit Scorecard with your FICO® Credit Score, number of recent inquiries and more.
  • Freeze It® on/off switch for your account that prevents new purchases, cash advances & balance transfers in seconds.
  • Get an alert if we find your Social Security number on any of thousands of Dark Web sites.* Activate for free.
  • 0% intro APR on purchases for 6 months, then the standard variable purchase APR of 12.99% - 21.99% applies.
  • See Rates & Fees

See additional details for Discover it® Student chrome

More Info

No foreign transaction fees. If you’re planning to study or vacation abroad, you’ll want a student credit card that doesn’t charge foreign transaction fees, such as the Bank of America® Travel Rewards for Students. Otherwise, you may be subject to charges of 3% to 5% of the amount of each transaction when you use your credit card to make purchases outside of the U.S.

The Bank of America® Cash Rewards for Students, on the other hand, charges foreign transaction fees of 3% of the U.S. dollar amount of each transaction.

Credit bureau reporting. If you’re signing up for a student credit card to help build your credit history, you’ll want to make sure the card reports to all three credit bureaus – Experian, Equifax and TransUnion. Most student card companies report your account balance, payment history and credit line to the credit bureaus, but you should confirm that with the issuer before you apply.

Having positive information reported is key to building up a great credit score. That’s why it’s essential that you pay your bill on time every month and keep your credit utilization (which is the amount of credit you use divided by your card’s credit limit) well below 30% for optimal results. For example, if you have a credit card limit of $5,000, you should keep your card balance under $1,500.

Read: What is Credit Utilization?

Rewards program. There are several student credit cards that offer sign-up bonuses and rewards on every purchase, which can be helpful If you want to earn rewards to help offset the cost of future purchase.

For example, the Discover it® Student Cash Back offers the following rewards rate: Earn 5% cash back on everyday purchases at different places each quarter like grocery stores, restaurants, gas stations, select rideshares and online shopping, up to the quarterly maximum when you activate. 1% unlimited cash back on all other purchases - automatically. Plus, Unlimited Cashback Match – only from Discover. Discover will automatically match all the cash back you’ve earned at the end of your first year! There’s no minimum spending or maximum rewards. Just a dollar-for-dollar match.

Discover cashback rewards can be redeemed for statement credits, charitable donations, merchandise, gift cards and more.

  • 0% intro for 6 Months*

  • Earn 5% cash back at different places each quarter up to the quarterly maximum, when you activate*

  • 12.99% - 21.99% Variable*

Highlights
  • INTRO OFFER: Unlimited Cashback Match – only from Discover. Discover will automatically match all the cash back you’ve earned at the end of your first year! There’s no minimum spending or maximum rewards. Just a dollar-for-dollar match.
  • Earn 5% cash back on everyday purchases at different places each quarter like Amazon.com, grocery stores, restaurants, gas stations and when you pay using PayPal, up to the quarterly maximum when you activate. Plus, earn unlimited 1% cash back on all other purchases – automatically.
  • Good Grades Rewards: $20 statement credit each school year your GPA is 3.0 or higher for up to the next 5 years.
  • No annual fee. No late fee on first late payment. No APR change for paying late.
  • Get 100% U.S. based customer service & get your free Credit Scorecard with your FICO® Credit Score, number of recent inquiries and more.
  • Freeze It® on/off switch for your account that prevents new purchases, cash advances & balance transfers in seconds.
  • Get an alert if we find your Social Security number on any of thousands of Dark Web sites.* Activate for free.
  • 0% intro APR on purchases for 6 months, then the standard variable purchase APR of 12.99% - 21.99% applies.
  • See Rates & Fees

See additional details for Discover it® Student Cash Back

More Info

Alternatives to student credit cards

If you don’t meet the criteria necessary to qualify for a student credit card, you may want to consider a secured credit card first, such as the Capital One® Secured Mastercard® or Discover it® Secured. These cards are designed for people 18 or older looking to establish or rebuild their credit.

Unlike traditional credit cards, secured cards require a security deposit, which will serve as the cardholder’s line of credit. That said, your security deposit will be refunded when you pay your balance in full and close your account or transition to an unsecured card.

The information related to the Wells Fargo Cash Back℠ College Card has been independently collected by CompareCards and has not been reviewed or provided by the issuer of this card prior to publication.


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