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Building credit as a college student is an essential step to a life of financial responsibility, helping you form a solid relationship with the money (and plastic!) in your wallet. Opening up your own line of credit as a young adult can be daunting, but the short- and long-term benefits are undeniable.
In the not-so-distant future, having a line of credit attached to your name will be important when you want to apply for a car loan, a mortgage, or even getting approved for utilities at your first apartment.
From valuable cash-back credit cards perfect for a student with an existing (but limited) credit history to student credit cards designed specifically for first-timers with no credit at all, here you’ll find the perfect mix of no-annual-fee credit cards designed specifically to fit your student needs.
Best credit cards for college students
Chase Freedom Unlimited: Best for students with established credit.Capital One SavorOne Student Cash Rewards Credit Card Best for most college students.Capital One Quicksilver Student Cash Rewards Credit Card Best for studying abroad.Citi® Double Cash Card: Best for flat-rate cash-back.Discover it Student Cash Back Best for students with good grades.The information for the Discover it Student Cash Back has been collected independently by The Points Guy. The card details on this page have not been reviewed or provided by the card issuer.
Comparing the best credit cards for students
Credit cardBest forRewards rateAnnual feeChase Freedom UnlimitedEstablished credit.5% cash back on travel purchased through Chase Ultimate Rewards, our premier rewards program that lets you redeem rewards for cash back, travel, gift cards, and more.3% cash back on drugstore purchases and dining at restaurants, including takeout and eligible delivery service.1.5% on all other purchases.Plus, new cardholders earn an additional 1.5% back on all purchases (on up to $20,000 in spending) in the first year.$0.Capital One SavorOne Student Cash Rewards Credit CardMost college students.Earn 3% cash back on dining, entertainment, popular streaming services, and grocery stores (excluding superstores like Walmart and Target) and 1% on all other purchases.$0.Capital One Quicksilver Student Cash Rewards Credit CardStudying abroad.Earn 1.5% cash back on all purchases.$0.Citi Double Cash CardFlat-rate cash back.Earn 2% cash back on every purchase – 1% when you buy and 1% when you pay your bill.$0.Discover it Student Cash BackGood grades.Enroll each quarter to earn 5% back on your first $1,500 in purchases in rotating quarterly bonus categories and 1% on all other purchases.$0.Best credit cards for college students
Chase Freedom Unlimited
THE POINTS GUY
Sign-up bonus: Earn an additional 1.5% cash back on everything you buy (on up to $20,000 spent in the first year).
Rewards rates: 5% cash back on travel purchased through Chase Ultimate Rewards; 3% cash back on drugstore purchases and dining at restaurants, including takeout and eligible delivery service; and 1.5% on all other purchases. (These rates do not reflect the additional 1.5% back for new cardholders).
Why we like it: Not only is the Chase Freedom Unlimited a great credit card for students, but it’s also a valuable card for anyone looking to earn Ultimate Rewards points. The flat 1.5% cash-back rate on the card is straightforward, yet it can also provide even more value when you pair the Freedom Unlimited with a more premium Chase card in the future — such as the Chase Sapphire Preferred Card or Chase Sapphire Reserve. That’s because you can combine your points into a single account, increasing their value for travel rewards through the Ultimate Rewards portal and enabling your earnings to be transferred to over a dozen travel partners, including United and Hyatt.
We’ve specifically chosen the Freedom Unlimited for students who may already have an existing line of credit thanks to their own personal card or by being authorized users on a parent’s credit card. While the card may have tougher approval odds for a young adult compared to many others on this list, the Freedom Unlimited is a viable option for applicants with good to excellent credit scores, even with a limited credit history. This is a terrific starter card for students when you factor in the cash-back rewards that never expire, plus a bevy of potential future redemption options.
Annual fee: $0.
Read our full review of the Chase Freedom Unlimited.
Official application link: Chase Freedom Unlimited
Capital One SavorOne Student Cash Rewards Credit Card
Sign-up bonus: Earn $50 when you spend $100 in the first three months.
Rewards rates: Earn 3% cash back on dining, entertainment, popular streaming services, and grocery stores (excluding superstores like Walmart and Target) and 1% on everything else.
Why we like it: The Capital One SavorOne Student offers high potential if you’re a college student with an active lifestyle. Offering a generous 3% on four popular spend categories, you’ll earn tons of cash back in no time. The SavorOne Student offers no foreign transaction fees and will be the easiest for approval for students with no existing credit history. Plus, it’s an excellent starter card for students who want to build a relationship with Capital One and keep a high-earning, no-annual-fee credit card in their wallet for years to come.
Annual fee: $0.
Read more about why we recommend the SavorOne Student.
Official application link: Capital One SavorOne Student Cash Rewards Credit Card
Capital One Quicksilver Student Cash Rewards Credit Card
Sign-up bonus: Earn $50 when you spend $100 in the first three months.
Rewards rates: Earn an unlimited 1.5% cash back on all purchases.
Why we like it: The Capital One Quicksilver Student is a no-frills cash-back card with a simple rewards system. You can expect no annual fee, no foreign transaction fees and a solid 1.5% cash-back on every purchase. If you’re the type of student who values simplicity and wants to ensure that you’re earning rewards on all your purchases (rather than in certain spending categories), the Quicksilver Student may be the better choice for you.
It’s an especially great card for studying abroad since you’re avoiding foreign transaction fees and earning 1.5% cash-back on everything — whether it’s a train ticket to a new country or souvenirs at a gift shop.
Annual fee: $0.
Read more about the Quicksilver Student.
Official application link: Capital One Quicksilver Student Cash Rewards Credit Card
Citi® Double Cash Card
ERIC HELGAS/THE POINTS GUY
Sign-up bonus: None.
Rewards rates: Earn 2% cash back on every purchase — 1% when you buy and 1% when you pay your bill.
Why we like it: If you’re looking to earn a solid cash-back return on everyday purchases beyond your first year, you may want to consider the Citi Double Cash Card. As its name suggests, the card earns 2% cash back on all purchases — 1% when you make a purchase and another 1% when you pay your statement. While other mid-tier credit cards may have more valuable perks, 2% back on everything leads the pack in terms of flat-rate rewards for cash-back credit cards.
Like the Freedom Unlimited, opening the Double Cash card can ultimately unlock even more valuable rewards. You can open the Citi Premier® Card down the line and effectively convert your Double Cash earnings into fully-transferable Citi ThankYou points — which TPG values at 1.8 cents apiece.
The downsides are that the Citi® Double Cash Card carries a 3% foreign transaction fee, so you won’t want to use it outside of the U.S. And as with the Freedom Unlimited, this card is harder to gain approval for than the student-centric cards on this list.
Annual fee: $0.
Read our full review of the Citi Double Cash.
Official application link: Citi® Double Cash Card
Discover it Student Cash Back
Sign-up bonus: Cardholders get an unlimited dollar-for-dollar match of all the cash back you’ve earned at the end of your first year.
Rewards rates: Enroll each quarter to earn 5% cash back on your first $1,500 in purchases in rotating quarterly bonus categories (then 1%) and 1% cash back on all other purchases.
Why we like it: The Discover it Student Cash Back offers some of the highest returns for students — with 5% cash back on the first $1,500 in purchases from rotating categories each quarter. You’ll have to activate this bonus each quarter, but you can frequently find useful merchants like gas stations, restaurants or Amazon.com. And instead of a sign-up bonus, cardholders will enjoy a cash-back match of all of the earnings from the end of your first year.
In addition, you’ll earn a $20 statement credit each school year that you earn a 3.0 GPA or higher for up to the next five years — thus rewarding you not only for good credit habits but for good grades.
If you plan on studying abroad, keep in mind that Discover has a lower acceptance rate at merchants than Visa and Mastercard do.
Annual fee: $0.
The information for the Discover it Student Cash Back has been collected independently by The Points Guy. The card details on this page have not been reviewed or provided by the card issuer.
Research methodology
When determining the best credit cards for college students, we looked at multiple factors most relevant to young adults. We analyzed factors such as ease of approval, student-focused rewards structures and cards without foreign transaction fees.
We also focused exclusively on credit cards with no annual fee. While many great rewards credit cards on the market have an outsized value that more than make up for an annual fee, it’s always a good practice to start slow with a no-annual-fee card early on in your credit journey.
Related: Capital One’s two new credit cards are the best for college students
How do student credit cards work?
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Student credit cards are geared toward individuals 18 (and older) who don’t yet have a credit history or credit card in their own name. For this reason, they’re typically much easier to be approved for and often do not require a good or excellent pre-existing credit score. Issuers tend to be more stringent in delineating between qualified and unqualified credit card applicants for higher-end cards.
For the most part, student credit cards work the same way that most credit cards work. You’re provided with a credit limit representing the maximum amount of money you can borrow on that specific card for that month. You must then pay back the amount you borrowed by the due date when you receive your credit card statement to avoid incurring interest. For this reason, it’s important to remember that credit cards are not free money.
While managing your own finances and having a credit card in your name are big steps toward being an independent adult, make sure to check your account frequently and keep track of your spending to help get your FICO score off on the right foot.
RelatedTPG’s 10 commandments for credit cardsBuilding credit as a student
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Before building credit as a student, get familiar with the world of credit cards and rewards. Begin by checking your credit reports for free, and make sure to find a card that fits your score, needs and spending habits. Understand credit card lingo, including the following terms:
Annual fee: Although student credit cards usually do not have an annual fee, many premium rewards credit cards require an annual payment for maintaining a card in your name.Credit limit: After getting approved for a credit card, you will receive a credit limit. This is the maximum amount of money that the issuer will extend to you on this specific credit line during that payment cycle. However, try to use as little of that limit as possible since the percentage of your limit you use — called credit utilization rate — plays a major role in your credit score.Rewards: Many credit cards offer rewards in the form of cash-back, points or airline miles. There are many redemption options that range from using your rewards for a statement credit on your account to elaborate travel redemptions through transfer partners. You can learn all about how to get started in the world of rewards with our beginner’s guide to points and miles.Foreign transaction fees: Some credit cards incur fees when you use them outside the United States. These fees will generally cancel out any rewards you earn on the purchase, so be sure to swipe cards that waive foreign transaction fees when you travel abroad.Check out our comprehensive list of important vocabulary terms in the credit and travel industries at the TPG glossary.
Tips for parents about student credit cards
Helping your teen get their first credit card can be a nerve-wracking but worthwhile process. Teaching your children how to utilize credit responsibly is a valuable skill for their financial lives — and your peace of mind.
If you still aren’t comfortable with your student opening their own line of credit just yet, you can always add them to your personal account as an authorized user. This can usually be done directly through the credit card issuer, online or over the phone. Even though you’ll be the sole debtor and responsible for paying the actual statement balance each month, there are significant benefits to adding your child to your account.
Most importantly, as long as the account is managed properly, your children will likely get boosts to their personal credit scores, and it’ll add more depth to their credit histories. If your issuer reports this information to their respective credit bureaus, then adding your children to your account could give them FICO advantages when they’re ready to apply for a personal card in their (respective) name.
Related: Will authorized user status help you build credit?FAQs about student credit cards
Do I need a job to qualify for a student credit card?
While most credit card applications require you to input your annual income, you do not need a formal job title to be considered for most student credit cards. Many part-time jobs, internships and personal freelance work are acceptable as a form of income when applying for a student credit card. If you have no income, consider opening a secured credit card — which requires you to provide an up-front cash deposit before using the card — or have a parent or guardian add you as an authorized user to their account.
How old do I need to be to qualify for a student credit card?
As long as you are a student in a two- or four-year college and are 18 years or older, a U.S. citizen, and have some type of documentable income, then you are the ideal candidate for a student credit card. If you’re under the age of 21 and can’t prove that you are eligible for a credit card, then you may have the opportunity to get a co-signer (usually a parent or guardian) who can take responsibility for your payments should you fail to meet them that month.
However, keep in mind that this could affect both the credit score of the student and the score of the co-signer on the account, as even one missed payment can significantly impact your credit score.
What do I do if I get denied for a credit card?
Getting denied for a credit card can be disheartening, but it certainly shouldn’t be the end of your credit journey. Issuers technically have 30 days to respond to a credit card application. Still, they’ll often respond in a few weeks by mailing an official notice of your denial with a reason (or reasons) why you were not approved. The primary reason for students will likely be an insufficient credit history, especially if you apply for a credit card that’s not specifically marketed with students in mind. However, there may be other common reasons that young people may be denied, such as a mismatch between the information on your application and the information the credit bureau has on file.
Related: How to maximize your chances of being approved for a credit cardIf you’re denied for a credit card, we recommend that you call the credit card issuer and see if you can speak to a representative about their decision. Banks have a reconsideration line where customers may challenge their decision on a credit card application.
Before calling, ensure your correct identification and income information are on hand to field any questions the representative might have. The worst that can happen is that the issuer’s decision is not overturned. In that case, your credit score will likely fall by only a few points due to the hard inquiry on your credit, but these are temporary drops, and scores typically rebound quickly.
Bottom line
Students have many choices when it comes to picking a first credit card. While the best card for you will ultimately depend on what type of rewards you want, each card on our list provides substantial rewards at no annual cost. Many assist with promoting positive financial habits, and most are easier to get approved for than other rewards cards.
When starting your credit journey, remember that the length of your credit history (which includes the average age of your accounts) is one factor in your FICO score. So while you’ll likely graduate to a more premium card in the next few years, you’ll still want to keep that first card open for the foreseeable future.
If you have an existing credit history, the Chase Freedom Unlimited is the perfect card to start building a relationship with a premium issuer. And if you’re a complete novice to the credit game, either the Capital One SavorOne Student or Capital One Quicksilver Student would be an excellent choice for students, as neither one imposes foreign transaction fees, and they both deliver a solid cash-back return on your purchases.
Official application link: Chase Freedom Unlimited Official application link: Capital One SavorOne Student Official application link: Capital One Quicksilver Student Official application link: Citi Double Cash
Additional reporting by Ryan Wilcox, Stella Shon and Christina Ly.
Title: The best credit cards for college students
Sourced From: thepointsguy.com/guide/starter-credit-cards-college-students/
Published Date: Fri, 05 May 2023 14:00:04 +0000
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