5 Best Student Credit Cards

Building credit is as important as maintaining it. For college students, it’s valuable to focus on building a strong credit history, learning money management and financial responsibility, and preparing for the future.

For college students who put an emphasis on building credit while they’re still in school, it’s possible to graduate with a credit score that’s in the 700s. When this is paired with a competitive starting salary, you’re going to be better equipped to make big purchases, and you’ll get the most favorable terms on any loans you may get early in adulthood.

Having a student credit card is one way to build credit, but this comes with caveats and important considerations. When students have credit cards, they have to be responsible, because instead of building a strong financial foundation, they could end up grappling with debt and serious long-term repercussions.

What Is a Student Credit Card?

A student credit card is marketed toward students. The application requirements may be less stringent than they are for other cards, but card companies no longer aggressively market these products to students.

In the past, credit card companies would do anything to get students to sign-up for cards, even without them meeting the minimum criteria. It would be common for a company to approve a student with no job, no income, and no cosigner.

There were changes in the law relatively recently that do now require card companies verify students’ income before they give them a credit card, and without income, most card companies require a co-signer.

The income a card issuer may look at includes money earned from a job, even part-time, and you can include money from your parents or someone else if you’re under 21; however, it must be regularly deposited into a bank account with your name on it.

A student credit card, along with a higher chance of approval, may also have a lower credit limit. Some will have rewards or perks geared specifically toward students.

The core things a student would need for approval include not already having bad credit history, some source of income even if it’s small, and being a student over the age of 18. You’d also have to provide a Social Security Number and proof of U.S. citizenship or residency for most cards.

While the limit on most student credit cards is initially low, with positive payment history, the limit may be gradually increased.

3 Pros of Getting a Credit Card In College

There are benefits of getting a credit card in college, and it can be a good financial move in certain circumstances.

Build Credit

A credit card, when managed responsibly, is a good way to build your credit history. You can show a history of paying your card on time, and if you keep the debt you carry low on the card, this is good for your credit score since you aren’t maxing out the credit available to you.

The best option for students with limited credit history is to get a card and make a small purchase each month on it that they then pay off, on-time.

Then there’s no interest accruing, and you’re not over-extending yourself.

Developing Good Spending Habits

Learning how to live independently and responsibly as an adult is an important part of your college years.

When you have your own credit card, this encourages you to develop good spending habits. It helps you see the cause-and-effect of spending money and then repaying it. You’re also learning how to keep up with a monthly payment and stay on top of your financial obligations.

You can also use your statements to track your spending, which is something you’ll need to do throughout your life to create and stick to a budget.

Emergencies

When you’re away at school, you could face an emergency situation where you need access to money.  Of course, in situations like this, having an emergency fund to tap into is ideal, but apart from that, having a student credit card provides you and your family some peace of mind if you run into something like this.

4 Cons of Getting a Credit Card in College

For some students, a credit card may not be the right choice, particularly if they aren’t mature enough to handle the responsibility.

Credit Score Damage

While having a student credit card can help your credit score and help you do things in the future like rent an apartment or buy a house, it can have the opposite effect if you aren’t responsible. Having a credit card and missing payments or wracking up too much debt can seriously affect your credit score.

The damage can be difficult to overcome, and if you make poor financial decisions in college that impact your credit score, it may delay your ability to make big purchases later in your life.

Debt Load

College students are already graduating with enormous amounts of student loan debt. Currently, in 2020, student loan debt is at a record $1.6 trillion in the U.S.

Student loan debt is now the second-highest consumer debt category, and the average amount of debt for the class of 2018 is $29,200.

That’s coupled with the fact that one in four college students leaves school with more than $5,000 in credit card debt, and one in 10 leaves with more than $10,000 in credit card debt alone.

That can easily deter future plans and make it difficult to financially progress even life, even after graduating and landing a job.

Accruing debt during college could, in theory, impact your life ten years or more into the future, but it can be a challenge for college students to think about these long-term ramifications.

The Temptation to Overspend

College students are young and often on their own for the first time. Having access to a credit card can feel like a license to spend, and that is not only going to affect their credit history and debt load, but it’s also setting the stage for poor long-term habits.

Effects on Parents

Some college students have their parents co-sign for them to get a card, or they might have a card that’s part of their parents’ credit card account. Either way, college students’ reckless spending or poor financial habits could then start affecting their parents’ credit as well.

5 Best Credit Cards for Students

If you’re a student and you’ve decided a credit card is right for you, or you’re a parent of a student, the following are good options.

1. Journey® Student Rewards from Capital One®

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  Journey Student Rewards from Capital One: Best for Cash Back

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  • Basics: The Journey Student Rewards gives 1% back on all purchases automatically. There’s a 25% cash back bonus for each month the payment is made by the due date.
  • Pros: The Journey Student Reward offers not only 1% cash back on all purchases automatically, but it also has a $0 annual fee and a cash back bonus each month when the bill is paid on time, encouraging good financial habits. Each month that you pay your bill on time, you earn a cash back rate of 1.25%. Cardholders are automatically considered for a higher credit line in as little as 6 months. Students can use CreditWise from Capital One to access their credit score and monitor their credit, and there are no foreign transaction fees.
  • Cons: The variable APR on the Journey Student Rewards is relatively high, and there’s no introductory purchase APR. There is a late payment fee of $39.
  • WELCOME OFFER

    None

  • ANNUAL FEE

    $0

  • PERKS

    • Pick your own due date
    • Free CreditWise access
    • $0 fraud liability
    

2. Citi Rewards+ Student Card

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  Citi Rewards+ Student Card: Best for Supermarkets and Gas Stations

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  • Basics: The Citi Rewards+ Student Card gives 2X ThankYou points at both supermarkets and gas stations up to the first $6,000 annually. Earn one point per dollar on all other purchases, and each purchase is rounded up to the nearest 10 points, with no limit.
  • Pros: Along with the opportunity to earn double ThankYou Points on supermarket and gas purchases (with the points rounding up on all purchases), another perk of the Citi Rewards+ Student Card is the opportunity to get 10% points back for the first 100,000 ThankYou Points redeemed each year. There is a 0% introductory APR for seven months after opening a new account, and there’s no annual fee. You can also earn 20,000 bonus points after spending $1,500 in purchases in the first three months of opening your account, it is redeemable for $200 in gift cards at thankyou.com
  • Cons: After the introductory APR period, the variable APR can be relatively high, and you may need to have good credit or better for approval. There is also a 3% foreign transaction fee with the Citi Rewards+ card.
  • WELCOME OFFER

    Limited Time Offer -- 20,000 bonus points after spending $1,500 in the first three months

  • ANNUAL FEE

    $0

  • PERKS

    • 2X ThankYou Points on supermarket and gas purchases
    • Round up to the nearest 10 points on all purchases
    • 10% points back for the first 100,000 points redeemed each year

3. Deserve EDU

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  Deserve EDU: Best For Amazon Shoppers

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  • Basics: The Deserve EDU card is from the Deserve company, which specializes in offering financial products to people with limited credit histories. The Deserve EDU student card features 1% cash back on all purchases and a free Amazon Prime Student membership for a year after spending $500 in the first three billing cycles. The cash back is received as statement credits in increments of $25.
  • Pros: The Deserve EDU card along with cash back on all purchases has no annual fee and perks like cell phone protection and no international transaction fees. The variable APR rate is the same across the board for all cardholders and international students don’t need a Social Security number to apply. The Amazon Prime Student subscription fee can save students up to $59 when they use the Deserve EDU Mastercard as their method of payment.
  • Cons: The primary downside of the Deserve EDU card is the fact that while the variable APR doesn’t change based on creditworthiness, it is pretty high. You can’t do balance transfers or cash advances with this card either.
  • WELCOME OFFER

    Free Amazon Prime Student for a year after spending $500 in the first three billing cycles.

  • ANNUAL FEE

    $0

  • PERKS

    • No foreign transaction fee
    • Up to $600 in cell phone insurance
    • Mastercard Platinum Benefits

4. Deserve PRO Card

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  Deserve PRO Card: Best for Travel and Entertainment

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  • Basics: The Deserve PRO card is also an option from the Deserve company, which strives to approve people for credit cards based on factors outside of the typical metrics, which is why the company, in general, can be a good option for students. You might be approved for the Deserve Pro card even if you don’t have a robust credit history. The Deserve Pro card features 3% cash back on travel and entertainment spending, 2% cash back on restaurants and 1% cash back on everything else.
  • Pros: The cash back rewards with the Deserve Pro are good for what many students spend the most on including travel, entertainment and restaurants. There’s no annual fee, and the card comes with a free Priority Pass Membership for a year if you meet spending requirements, which is great if you spend any time in airports. There are no international transaction fees, and there’s cell phone protection as well as a collision damage waiver.
  • Cons: As is the case with many other student cards, the variable APR on the Deserve PRO card can be high. To get the Priority Pass membership, you have to make $1,000 in purchases in the first 90 days after activating your account.
  • WELCOME OFFER

    Complimentary Priority Pass membership with $1,000 in purchases in the first 90 days after card activation

  • ANNUAL FEE

    $0

  • PERKS

    • No foreign transaction fee
    • Up to $600 in cell phone insurance
    • Mastercard Platinum Benefits

5. Petal Visa

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  Petal Visa: Best for Lower Interest Rates

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  • Basics: The Petal Visa is often named as one of the best starter credit cards because it does offer the opportunity for relatively low interest rates. Credit limits range from $500 to $10,000, and the card initially earns 1% cash back on purchases. After six on-time monthly payments, that goes up to 1.25% cash back, and after 12 on-time monthly payments, the rate is 1.5% cash back.
  • Pros: With the Petal card, good financial habits are encouraged because of the incremental increase in cash back rewards that come with regular on-time payments. Petal is one of the few cards that goes beyond credit score when approving new applicants and there are no fees. The Petal App is great for students because it helps them gain insight into their spending so they can build good habits and start learning how to budget. The app includes features such as an interest calculator, and credit score tracking, as well as a spending planner. The Petal card may come with higher limits than other similar cards, which helps account holders keep their credit utilization low, which is an important part of your credit score. Certain merchant offers are automatically linked to card accounts, and these offers can mean up to 10% cash back with certain qualifying merchants. There is no late payment fee or annual fee.
  • Cons: While the lowest APRs with the Petal card are relatively low for a student card, it’s possible some applicants could get higher rates. Also, while Petal’s approval process may work well for someone with limited credit, if you have bad credit, you may not qualify.
  • WELCOME OFFER

    None

  • ANNUAL FEE

    $0

  • PERKS

    • No late fees
    • No foreign transaction fees
    • Mobile app helps you manage your money responsibly
    • Up to 10% cash back with certain merchant offers