Making a good decision among the best student credit cards isn't always easy. Some cards take advantage of the fact that students are eager to get started on building their credit history by building unfavorable terms into their account agreements.
There are, however, some solid choices which will serve you well throughout your secondary educational experience. Each one has something a little different to offer so it's important to evaluate each offer in detail. Below, I've reviewed the best credit cards for college students to give you a leg up in the decision-making process.
In This Guide
The Best Credit Cards For Students: Our Top Picks
The following are my top 5 picks for jumpstarting your credit history while in college:
Discover it for Students Review
- No annual fee
- 0% APR for first six months
- $20 bonus each year you have a minimum 3.0 GPA
- Free monthly FICO Credit Score
- Cash back matching for the first year
- 5% or $10 cash advance fee
- 3% balance transfer fee
The Discover it® for Students is the premier credit card for students to effectively manage their funds and learn to spend responsibly. There's no annual fee, foreign transaction fees, over-limit fee or late fee on your first missed payment. Plus, Discover is known for its stellar customer service and high customer loyalty ranking.
This card gives you 5% cash back up to $1,500 in purchases made in eligible rotating categories, plus 1% cash back on all other purchases. Categories for the 5% tier change each quarter and include Amazon, ground transportation (trains, taxis, etc.), and gas stations. In addition, you'll get $20 for each school year during which you maintain at least a 3.0 GPA, for a maximum of five years. The Discover it® for Students APR at the time of this review ranges between 13.24% and 22.24%, depending upon your creditworthiness. Your first six months will be at 0% APR.
If you're currently in college and looking for a starter credit card to get your feet wet in the financial world, consider the Discover it® for Students. It gives you an impressive array of offerings in terms of cash back and services, making it tops on my list as the best first credit card for college students.
- Sign-up bonus: Discover will match the cash back you've earned for the entire year, at the end of your first year of card membership.
- Key fees: Cash advances cost $10 or 5%, whichever is greater, and late (second and subsequent) and returned payment fees are both $37.
- Introductory APR: You'll get 0% APR on purchases and 10.99% on balance transfers for the first six months.
- APR: After the intro APR your rate will be 13.24% to 22.24% depending upon your creditworthiness. The cash advance APR is 25.24%. There is no penalty APR.
- Other perks: You'll get free monthly FICO scores, the Freeze It® feature which allows you to turn your card on and off in case you lose it temporarily, and no foreign transaction fees. You also get fraud protection and free overnight card replacement.
CiTi ThankYou Preferred
- No annual fee
- 2500 bonus points after spending $500 within first 90 days
- 0% APR for seven months
- Choose payment due date
- 2% cash back on dining and entertainment
- 5% or $10 cash advance fee
- 4% or $5 balance transfer fee
- Rewards points only redeem for half value in cash
The Citibank ThankYou® Card for College Students allows you to not only build up your credit but earn cash back along the way. You can earn 2% cash back on dining and entertainment (such as restaurants and movie theaters). On other everyday purchases, you'll get 1% cash back and never pay a cent towards an annual fee.
Citi's bonus program is robust as well when you compare student credit cards. Spend $500 in your first three months and you'll get 2500 points on top of your normal cash back. It's important to keep in mind that points are only redeemable at full value (one cent per point) when you use them for gift cards or other merchandise available from Citibank's affiliates.
The Citi Dividend Card has a number of features that would appeal to college students, including standard perks like travel protections. This card's student-friendly features give it a prominent spot in my top 5 student credit cards.
- Sign-up bonus: Citibank awards you 2500 points for spending $500 within the first three months of ownership..
- Key fees: Cash advances cost $10 or 5%, whichever is greater, and balance transfers are the higher of 4% or $5. Late and returned payments are up to $35.
- Introductory APR: You'll get 0% APR on purchases and balance transfers for the first seven months.
- APR: After the intro APR expires your rate will be somewhere between 14.24% to 24.24%, depending upon your creditworthiness. The cash advance APR is 25.49%. The penalty APR is 29.99%.
- Other perks: Citibank offers a unique perk called Citi Price Rewind. Whenever you purchase a registered item, their system automatically searches for a lower price online and refunds you the difference if a lower price is found within 60 days of purchase. You also get presale access to event tickets and other entertainment experiences through Citi Private Pass.
Journey Student Rewards
- No annual fee
- Rewards points bonus for on-time payments
- Average credit approved
- Free credit score monitor
- Fraud coverage
- Mediocre rewards program
- Set APR, on the higher end
- 3% or $10 cash advance fee
The Journey Student Rewards card appeals to students for a number reasons. You'll earn 1% cashback on purchases plus a 25% bonus each month you pay your bill on time which comes out to a total of 1.25% cash back. You'll never be capped or limited in the number of cash back rewards and they never expire. Rewards programs aren't standard among student credit cards, which makes this card a stand-out.
You'll need average credit to be approved so individuals who are bordering on poor/bad credit may have some difficulty getting approved. All in all, this card is an above average offering from Capital One. It provides students with the tools and resources to build or improve their credit plus offers flexible features like payment date and unlimited earning potential.
- Sign-up bonus: There is no sign-up bonus at the time of this review.
- Key fees: Cash advances are $10 or 3%, whichever is greater, and late or returned payments cost up to $35.
- Introductory APR: There is no introductory APR.
- APR: Capital One Journey Student Rewards comes with a set APR of 20.24% on purchases, balance transfers, and cash advances. While the purchase APR is a bit higher than some cards, the cash advance rate is much lower. If you use cash advance frequently, the rates may balance out for you.
- Other perks: You'll have access to your credit score and monitoring tools via the CreditWise function. You can also earn a higher credit limit by making the first five payments on time. There are no foreign transaction fees, which is helpful if you're studying abroad, and you'll get fraud protection as well.
Key Considerations For Student Credit Cards
The Best Student Credit Cards
Ultimately, the right student credit card will depend on the individual student's needs, income, and credit rating. As you assess the offers in my list of student credit card reviews, keep the following in mind.
- Make sure the rewards program gives you points for purchases you actually normally make, like gas or entertainment.
- If you think you might have trouble making payments exactly on time, choose an offer without late fees or penalty APRs if possible.
- Keep it at the forefront of your mind that your financial behavior now will affect your ability to get a car loan, home mortgage, even your dream job. Manage your affairs accordingly.
Defining Credit Card Terminology
Feeling overwhelmed by the terminology? Well, you're not alone. The financial jargon used on applications is often tedious and misleading which is why it's important to break down each individual component and take it step-by-step.
This is the fee charged on a yearly basis for being a cardholder. If possible, look for a card that has no annual fee especially if you're paying a high APR.
Extra perks like cash back rewards or sign up bonuses are popular incentives offered by lenders. Choose a card which has extras catered to your tastes. Students, for example, may be interested in cash back bonuses at retailers like Amazon.
The APR is the annual percentage rate or cost to borrow the money, expressed as a yearly figure. The APR includes the financed amount, finance charge and the frequency of payments. It's based on a number of factors including the current interest rates as well as your creditworthiness. Check the bottom of the provider's page for specific terms and agreements or a hyperlink which directs you to an external page.
First-time cardholders may be inundated by responsibilities embodied in a credit card. For that reason, customer service can provide a vital lifeline for answering questions, balance inquiries, and dealing with lost or stolen property.
Tips & Advice
Getting your first credit card, combined with being away from home for the first time, can make you feel like a kid in a candy store. But now is not the time to go nuts buying all of those things you've always wanted - it's time to begin good habits for living in the adult world. Believe me, you'll be glad you did later on. I've put together a list of tips to get you started on the path to financial responsibility:
Paying just a few dollars over the minimum payment each month can shorten your repayment period by months and save you a considerable amount in interest.
1. Try for a Low Credit Limit
Don't apply for cards with huge limits. It's good to have a credit line available for emergencies, but it's not good to have too much temptation sitting in your wallet. $500 - $1000 should be plenty.
2. Make Your Payments on Time
While credit reporting bureaus aren't typically notified unless you're a full month late with your payment, you may still get hit with painful late fees. Besides the fees, which can start you down the road of struggling to keep up with your debt, it's just not a good habit to get into. Paying on time should be a non-negotiable aspect of building your credit reputation.
3. Pay Extra over the Minimum
The minimum payment is just that - the absolute minimum amount you need to pay in order to keep your account current on your credit report. If you only pay the minimum, you're not making any headway on your debt. Let's look at an example of this issue at work. Say you've got a $400 balance, with a minimum monthly payment of $15.
If your card has an APR of 20%, you're going to pay over $6 in interest alone that first month, and roughly $9 on your principal. Over time, if you only pay the minimum payment, this means it will take you three years to repay that $400, at a cost of $133 in interest.
Paying just a few dollars over the minimum payment each month can shorten your repayment period by months and save you a considerable amount in interest. Using the above example, if you paid $20/month rather than the minimum of $15, you would cut your repayment time down by nearly a year, and cut $43 off of your interest costs.
Check for Hidden Fees
While you certainly want to focus partially on the interest rates when you compare the best credit cards for college students, there are other fees of which you should be aware as well. Possible costs hidden among the fine print may include:
- Cash advance - these typically carry not only a per transaction fee, but a very high interest rate as well.
- Balance transfer - moving other debt to your new card may cost you as much as 3% - 5% of the transfer amount.
- Foreign transaction - if you're planning to study abroad, you'll want a card that waives this kind of fee.
- Returned payment - it happens to the best of us, we miscalculate our bank account balance and end up with a declined payment. Make sure this won't cost you an arm and a leg.
Most of the top student credit cards will carry some of these fees, just make sure to choose the one that foregoes those which would be most harmful in your situation.
Beware the Penalty APR
Many credit card companies have what's known as a penalty APR. What this means is you could be cruising along happy as a clam with your 18% interest rate, encounter a problem one month, end up a few days late with your payment, and bam - you're suddenly paying 29% interest. You can see how this could quickly derail your financial responsibility train.
How Does a Penalty APR Work?
Banks and other card issuing financial institutions may raise your interest rate if you are even one day late on a payment. Thanks to the Credit CARD (Card Accountability Responsibility and Disclosure) Act of 2009, administered by the Consumer Financial Protection Bureau, there are certain restrictions on penalty APRs. The CARD act set these rules in place in order to offer consumers more comprehensive protection from predatory lending practices. Here's what you should know:
- A penalty APR may be imposed for a payment that is even one day late.
- A penalty APR may only apply to future purchases, made after you have been given 45 days notice of the interest rate increase.
- Credit card companies may raise the APR on your existing balance, but only if you have been delinquent on your payments for at least 60 days. If you make your payment before 60 days are up, they cannot charge you a higher rate on your balance.
- Some issuers do not include a penalty APR in the terms of their student credit card agreements, so check for the details if this is something you'd rather avoid.
The best way to get a good start on a healthy credit rating is to use common sense. Only charge what you can afford to pay off that month, and make sure you keep your account in good standing by making payments on time or even early.
There are more than a few lenders on the list which offer exceptional student credit cards. Some lean towards cash back and bonus rewards while others are strong on points and low fees.
Take the time to review the aforementioned pros and cons prior to making a decision. And remember that the right credit card will present you with an opportunity to not only build your credit but better manage your financial portfolio. The time to start building your credit responsibly for the long term is when you are in school, and these cards give you the opportunity to do this.