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How to Determine the Best Credit Card for College Students

Last Updated: December 13, 2022
8 min read

Key Points About: Choosing a college student credit card

  1. A credit card can help you build credit, cover unexpected expenses, and earn cash rewards on purchases that you’d have to make anyway, all while getting your college degree.

  2. A student credit card could help you learn how to successfully manage your personal finances while you’re a college student.

  3. Student cards will come with an interest rate, credit limit, and more, just like other credit cards – but may have unique benefits that are more useful for college students.

A student credit card can be a great way to learn good money habits, but it may require you to learn some new skills. It’s great to have a credit card on hand for emergency expenses, to earn cash back and help build your credit history.

It’s important to learn about how a student credit card works so that you can choose the student cash rewards credit card that’s best for you. And, equally important, learn how to manage your credit account so you don’t accumulate credit card debt.

What are the benefits of a student credit card?

A student credit card can help you establish good credit

Unless you’ve been an Authorized User on someone else’s existing and well-maintained credit account, you probably were too young or lacked the consistent income source to establish your own credit history. Younger college students or international students might struggle to qualify for a card when applying for their first credit account. Credit card companies design student cards specifically to help college students establish credit when they don’t necessarily have any at account opening.

So, how can credit cards help you establish your credit? If you have an active credit card account in good standing on your credit report, that means that you have financial accounts that involve a company lending you money and repaying it as promised. Your account activity- such as the amount that you spend, how much you repay, whether you make payments on time – is shared with credit reporting agencies. These and other data points are part of your credit report and, ultimately, your credit score.

A student credit card is a great first credit card and way to begin building credit for college students. This is because it’s designed for first-time credit applicants.

Once approved for a student credit card, remember that there are some key practices that you’ll have to adopt if you want the experience to be a positive one that helps your build for the future.

How can you use your credit card responsibly?

There are many good habits that you can learn to use your student credit card responsibly, which will help you avoid credit card debt and can contribute to a good credit history.

1. Keep track of how much you spend.

2. Try to only use your credit card to make purchases that you know you will be able to repay in full within a month or two. This will reduce the amount of interest that you accrue and make it easier to pay your balance in full.

3. Make your account payments on time and for at least the amount that’s defined on your statement as the minimum payment due.

A student credit card can give you cash rewards.

Whether you’re buying textbooks, software, groceries, or other necessities, a cash back student credit card can earn rewards on the things that you’d need to purchase anyway.

Did you know?

Not only do you earn rewards on every purchase, with the Discover it® Student Cash Back Credit Card, you’ll get an unlimited dollar-for-dollar match of all the cash back you’ve earned at the end of your first year, automatically.1

A student credit card could help in an emergency

If an unfortunate event happens while you’re a college student, having some money on hand can make a real difference. It’s a good idea to have a source of financial security to make sure that you can get the help that you need to keep you safe.

What do the best credit cards for college students have in common?

Because you’re new to credit, and maybe to personal finance, you’ll want to explore credit card options to find one that fits. Here are some of the features that a good student credit card should include:

  • No annual fee. This is basically paying for the privilege of credit. If you have a credit card with an annual fee, you’ll have to pay that annual fee every year that you have the card, even if you don’t use it. A $0 annual fee for the first year is not the same thing as a “no annual fee” card, because you’ll have to pay an annual fee after the introductory period.
  • Low or no credit score minimums. It might seem like a major feat to try to get your first credit card when you don’t have a credit history or credit report. Some student credit cards require a minimum low credit score to qualify, so look for one that has no or low credit score minimums.
  • A card that will graduate with you. As you begin building credit, one of the factors that helps contribute to your credit history is the length of accounts that you have open with a credit card issuer. It looks better if your credit report has credit accounts that have been open for a long time, rather than simply having a mixed of closed and new accounts. Therefore, rather than closing your student credit card account when you graduate, you may want to choose a student card with a credit card company that will convert that account to a non-student credit card when you graduate. Your credit history will then show that you’ve had one continuous account with that credit card issuer.
  • Perks that cater to college students. These could be things like extra cash rewards on things that you’re likely to purchase as a student, or a refer-a-friend program that helps you and your friends earn extra cash or rewards when you refer them to your student credit card company and they are approved for an account.
  • Student cash back rewards. As a college student, it’s helpful to earn rewards that you can actually use for things that are relevant to you. Look for a card that gives you fair cash back on purchases that you can redeem for cash back rewards just like cash. Check what the options are for the card that you’re exploring.

What to know before applying for your first credit card

Once you’ve found a student credit card that has the features that are important to you, there are a few important things to consider before you fill out a credit card application:

Check the interest rate

The interest rate or Annual Percentage Rate (APR) is how much you pay for the money that you spend on your credit card. Many student cards will have a 0% APR introductory offer, which begins at account opening and will apply to the purchases you make for a specific period of time. After the 0% introductory APR period ends, your interest rate will switch to what’s called a “standard” APR. You might not know what that rate will be until you’ve been approved for an account. This will be based on your credit report at the time you apply.

Consider pre-screened offers

If you’re at least 21 years old, you may receive pre-screened credit card offers for a student card. If you receive a pre-screened offer, it means that the credit card company did a basic credit check to get an idea of your credit history and determined that you meet the basic criteria for that card. While a pre-screened offer isn’t a guarantee that you’ll be approved for that card, if you have sufficient income and you continue to meet other requirements, your approval odds are likely good for that card.

Factor in fees

Beyond the annual fee, do your homework to see what other fees the credit card issuer might have for a particular card. You can find fees in the credit card terms or credit card agreement. You don’t want to be surprised by a late fee, returned payment fee, foreign transaction fee, or over-limit fee that you didn’t know your account could incur.

Understand how a credit card differs from other financial tools

As a college student, you may already have a number of different accounts that you are learning to manage as part of your personal finance portfolio. Here are some of the most common ones, and the key ways they differ from a credit card.

Student loan: A student loan is a set amount of money that is borrowed at a point in time. A credit card is a revolving line of credit.

Debit card: A debit card is tied to the cash that you have in your bank account or credit union. Your credit card allows you to spend up to your credit limit, even if you don’t have the ability to pay it back right away. If you end up having to spend a little more than you are able to repay in one month, you may begin to accumulate interest on the balance that you carry.

Secured card: A secured card is an alternative for someone who doesn’t have good credit or an established credit history. Your secured card credit limit is equal to the refundable deposit that you make – but that deposit is not used to repay the balance on your account. Find out more by learning about the Discover it Secured Card®

How to avoid unnecessary credit card rejections

Once you’ve done your research and determined the best student credit card for you, you’ll probably be eager to apply for your own. Here are some tips to help get you ready to submit your student credit card application.

1. Look at the student credit card requirements. You can find this information on a credit card issuer website, or by reaching out to the credit card company. Other financial factors, such as income, will also come into play.

2. Apply for one student credit card from one credit card issuer. When you submit your application, the credit card issuer will want to look into your credit history.

3. Have the information handy for the credit card application. Your credit card application is no different than you may have experienced with your student loans. When you apply for a credit card, you typically will need to provide:

  • Social Security number
  • Legal name
  • Current address
  • Income
  • Housing Costs
  • Proof of enrollment in school
  • Email
  • Phone number

Gathering the info you need to submit a credit card application will reduce your chances of it getting rejected on the basis of incomplete information.

The Discover it® Card

The Discover it® Student Cash Back Credit Card is a popular option for college students looking to build their credit history and earn cash back rewards.

No matter what student credit card you decide on, it’s important to use your credit responsibly. Consider starting out with a conservative credit limit and prioritize making on-time payments and keeping your credit card debt to a minimum. In turn, it’ll help you in your journey to establishing credit.

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