The Complete Guide to Student Credit Cards

Published June 15, 2021

11 min read

If you’re a student considering a credit card for the first time, you probably have a lot of questions. Why is a credit card for students important? How can you use a credit card to build your credit history? What are the requirements for student credit cards? Well, you’ve come to the right place. Here, you’ll find information on how a student credit card, like  Discover itⓇ Student Cash Back or Discover itⓇ Student Chrome , can help you build a brighter financial future. You’ll also get answers to student credit card and credit-building questions like: 

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  1. Why should you have a credit card as a student?
  2. How can a student use a credit card to build a credit history?
  3. Are there age and income requirements for a student credit card?
  4. What are alternatives to student credit cards?
  5. How do you compare student credit cards?
  6. How do you apply for your student credit card?

Why should you have a credit card as a student?

There are many reasons to have a credit card as a college student. A student credit card can help you:  

  • Establish and build your credit history
  • Learn how to manage your finances
  • Learn how a credit score works
  • Afford emergency expenses
  • Earn valuable perks

*See Additional Details Below for More Information

Establish and build your credit history

You’ve probably heard the terms “building credit,” “credit history” and “credit score,” but you may not know how these concepts apply to you. They likely haven’t, until now. Your credit history is a track record of how you repay debt. It’s boiled down to a three-digit number called a credit score.

Why is a credit score important? Your credit score can be used by lenders, cell phone companies, landlords to determine your eligibility for their services or the interest rates on money you borrow. That means your credit score can impact where you live, your job opportunities and even your cell phone plan. So, it’s worth it to build a solid credit history.

Your credit score can be used by lenders, cell phone companies and landlords to determine your eligibility for their services or the interest rates on money you borrow.

But how do you build credit history as a college student? A student credit card is a great first step. It’s a credit card that’s tailored to first-time cardholders who don’t have a long (or any) credit history. Some student credit cards, like Discover itⓇ Student Cash Back or Discover itⓇ Student Chrome, offer extra reminders and resources to help you build smart credit habits. A student credit card will kick off your credit history and, if used responsibly, can help you get you on the right path.

Learn how to manage your finances

With credit cards, it can feel like the sky’s the limit on what you can buy. But that’s not the case at all. A credit card should be a tool that helps you manage your finances and makes your life more convenient, not one that gets you into debt and financial trouble.

Here’s where the special features of student credit cards can come in handy. Student credit cards often have low credit limits, and low introductory APRs (or interest rates), all of which can act as guardrails as you learn how to manage credit as a student. Student cards are also frequently accompanied by tools and resources that can help you build good credit habits too. The Discover itⓇ Student Chrome credit card, for example, can help you track spending and pay bills on time through the accompanying mobile app. With a student credit card, the goal is to build a foundation of borrowing and repaying in a responsible way, not overspend just because you can.

Learn how to manage your finances. Low credit limits, track spending and tools to pay bills.

Learn how credit scores work

Let’s dig deeper into how credit scores work. FICO® Credit Scores generally range from 300 to 850. They’re calculated with algorithms created by the Fair Isaac Corp., which is why they’re called FICO® Credit Scores. A FICOⓇ Score is the sum of several factors—below shows how each category impacts FICO® Scores for the general population:

Learn how credit scores work. 35% payment history, 30% amount of debt, 15% credit mix, 10% length of history and 10% new credit.
  • 35% is payment history (how many payments have you missed)
  • 30% is amount owed (how much of your credit limit you’re using)
  • 15% is length of credit history (how long have you had credit for)
  • 10% is credit mix (how diversified your borrowing is)
  • 10% is new credit (how many new accounts you’ve applied for and recently opened)

Regular, responsible use of a student credit card—as well as making on time payments on all your other loans—may help you earn a good credit score through improving your performance in all of the factors that contribute to your credit score.

Use for emergency spending

A student credit card can be a good backup for emergencies. While it’s important to have an emergency fund (a stash of cash you only use in a pinch), a credit card can also come to the rescue in unforeseen situations like a flat tire or an unexpected medical bill. The key thing is to define what you consider an emergency. A new outfit for your birthday or plane tickets for spring break are not emergencies. Spending more than you’re able to pay back on a regular basis is a major and unfortunately common credit mistake. 

Earn cash back for your expenses

Another benefit of some student credit cards is that you can actually earn cash back when you make purchases. Many credit cards for college students offer cash back rewards that are tailored to the student lifestyle. With Discover itⓇ Student Cash Back, for instance, students earn 5% cash back on everyday purchases at different places each quarter, like Amazon, grocery stores, restaurants, gas stations and when you pay using PayPal, up to the quarterly maximum when you activate*. Discover also offers Cashback Match, an unlimited dollar-for-dollar match of all the cash back you’ve earned at the end of your first year, automatically.* That means you could turn $50 cash back into $100. Or $100 cash back into $200. There is no limit to how much Discover will match.  These are perks that plain old cash doesn’t have.

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How can a student use a credit card to build a credit history?

To develop a credit history, it takes more than simply having a credit card in your pocket. You need to use your credit card responsibly and check off a few key action items to maximize your student credit card’s impact on your credit score.

Pay your balance on time

In order for a Discover student credit card to help a student build credit with responsible use,* you must make your monthly payments on time. Remember, your payment history is the biggest factor — typically about 35% — of your FICO® credit score calculation. That’s why the Discover app’s student login allows you to set alerts for free, so you are reminded when a payment is due. Plus, you have the option to sign up for auto-pay.

Pay your balance on time. The Discover app's student login allows you to set alerts for free, so you are reminded when a payment is due.

Request a credit limit increase after 12 months of healthy usage

Why does this matter? Approximately 30% of your FICO® score is based on credit usage, including how much of your credit limit you actually use. In general, the lower you can keep your credit utilization ratio, the better. A good goal is to use a small portion your credit limit at any given time.

Increasing your credit limit can make your credit utilization ratio lower. For instance, if you regularly spend $500 a month and have a credit limit of $1,000 a month, your credit utilization ratio is 50%, which is a little high. If you’re granted a credit limit increase to $2,000 a month, and maintain your regular spending of $500 a month, your credit utilization ratio will be 25%. A credit limit increase on your student credit card can boost the credit usage factor of your credit score calculation. Discover reviews  Discover itⓇ Student Cash Back and Discover itⓇ Student Chrome cardmembers for automatic credit line increases throughout their life cycles . These automatic increases can optimize your credit utilization ratio and stay on top of your credit score. Note, different rules apply for our secured cardmembers.

Keep your account open

Length of credit history typically accounts for about 15% of your FICO® Score. That’s why it’s important to get started on good credit as early as possible. And not just that: You should also keep those early lines of credit open as long as possible.

If your student card is your oldest card, canceling it could reduce the length of your credit history and negatively impact your score. But, you may be wondering, what happens to a student credit card after I graduate? Well, you don’t need to cancel your student card or let it sit in your wallet unused just because you’re not in school. Discover allows you to continue using your student card after graduation so you don’t have to lose the perks you’ve enjoyed as a student.

Apply for new lines of credit after 24 months of healthy usage

If you’ve been responsible with your student credit card and made on-time payments for about two years, you can consider opening up a second line of credit, like a car loan. Waiting a couple of years will help you establish enough credit to get a more competitive interest rate for your new line of credit. And since a mix of credit accounts for about 10% of your FICO® score, it’s smart to diversify the types of credit you have as long as it makes sense for your budget and lifestyle.

Don’t ask for credit limit increases or new lines of credit too often

You can have too much of a good thing, though. Requesting credit increases or opening new lines of credit can negatively impact your credit score if you do it too often. Why? Creditors may get concerned you’re taking on too much credit at once and you won’t be able to pay back everything you borrow.

Remember, new credit accounts and hard credit inquiries account for about 10% of your FICO® credit score. The fewer new accounts and inquiries, the better. Spread your inquiries out and do your research before you make requests for new lines of credit or higher credit limits to ensure that you’ll qualify.

View your credit report and credit score regularly

Errors can show up on credit reports. That’s why it’s important to review your credit report at least once a year and check your credit score regularly. You can review your credit report through AnnualCreditReport.com. Regular check-ins will help you catch any mistakes and allow you to see how your credit behavior affects your credit score. You’ll quickly understand what credit habits you can use to your advantage and what isn’t helping your financial future.

Are there age and income requirements for a student credit card?

Now that you know how valuable student credit cards can be, you’re probably wondering how to get a student credit card. In other words, what are student credit card age limits and requirements?

Age restrictions

If you’re a student, you’re eligible for a student credit card starting at age 18. Every credit card company has their own distinct set of qualifications for student card approval. Some may include separate requirements for students under 21 and students over 21, like proof of income or a cosigner. Discover factors the unique life stage of students into the card approval process and designs its student credit cards for those who are new to credit.

Income or credit score requirements

While some student credit cards do have lower barriers to entry than other credit cards, some may have income or credit score requirements that render you ineligible. Do your research to understand the baseline qualifications for any credit card that interests you, and only apply when you’re a qualified candidate.

What are alternatives to student credit cards?

If you’re not able to obtain a student credit card because you are not a student or otherwise don’t qualify, you may want to consider a secured credit card like the Discover itⓇ Secured Credit Card. With a secured card, you make a deposit to secure your line of credit. This refundable deposit is used by the creditor if you fail to pay your balance.* Otherwise, the card functions very much like a traditional credit card. Your activity is reported to credit bureaus and will impact your credit score. With responsible use, you can build credit and may be eligible to eventually graduate to a traditional credit card.*

How do you compare student credit cards?

When comparing different offers on credit cards for students, there are a few factors you’ll want to consider in order to find the right student credit card for you.

Introductory offer

Introductory offers are perks creditors offer to incentivize you to sign up. These perks could include extra benefits for spending a certain amount in the first few months of having the card or a bonus simply for signing up. Keep in mind that intro offers expire after the introductory period ends and they’re just one part of a bigger package. Be sure the entire offer makes sense for you. A few freebies on the front end can be canceled out fairly quickly by fees or a high interest rate. Discover offers Cashback Match, an unlimited dollar-for-dollar match of all the cash back you’ve earned at the end of your first year, automatically.*

Interest rate

An interest rate, also called an APR, is what you’re charged to borrow money. If you don’t pay off your monthly balance in full or take balance transfers or cash advances, you’ll be responsible for that balance, plus an additional percent of that balance. That additional percent is the interest rate. While it’s not recommended to carry a balance on your credit card, emergencies do pop up and you may find yourself carrying a balance at some point. A high interest rate could turn a small emergency expense into a sizable amount of debt. So finding a card with a low interest rate is an important factor to consider when comparing student credit cards.

Some cards offer an introductory 0% APR (interest rate). That’s a great start but be sure you’re aware of the APR after the introductory period expires. Use the long-term APR, not the introductory APR, when you do your comparison.

Cash back or rewards program

Rewards are one of the many benefits of a credit card. To maximize their value, you should look for a card that rewards the type of spending you do. For example, Discover itⓇ Student Chrome offers 2% cash back at gas stations and restaurants (including cafes, takeout, delivery and fast food) up to $1,000 each quarter,* making it perfect for students who drive frequently and eat out often. But, if you don’t have a car or like to cook all your meals, it might not be the best fit for you. A card like Discover itⓇ Student Cash Back, which offers rewards on every purchase, could be a better match. Finding the right rewards and bonuses is all about assessing your spending habits and comparing card offers to see which best fits your lifestyle.

How do you apply for your student credit card?

Want to apply for a student credit card? Once you’ve done your research, found the right card for you, and double-checked that you understand all the terms and conditions, the hard work is over. A student credit card application is very simple and only takes a few minutes to complete. Note – you cannot apply for a credit card over the phone if you’re under 21.

You’ll just need to provide information such as:

  • Full name
  • Social Security number
  • Birth date
  • Current address and how long you’ve lived there
  • Email address
  • Annual income

Applying for a student credit card is a smart start to your financial future. Using your student card responsibly will set you up with a robust credit knowledge.

5%: Certain digital wallet transactions qualify for 5%, for more information see Discover.com/digitalwallets. Purchases made through third-party payment accounts, mobile or wireless card readers, virtual wallets or similar technology will not be eligible if the technology does not provide sufficient transaction details for rewards qualification. 5% Cashback Categories: In accordance with standard industry practices, merchants are assigned a merchant category code (MCC) typically based on their line of business, or the type of products and/or services they primarily sell or provide. Discover Card does not assign MCCs to merchants. Even if you make purchases at a merchant of items that appear to fit in a rewards category, the merchant m ay not have an assigned MCC in that rewards category. Only purchases made from merchants located in the United States are eligible for 5% Cashback Bonus. Rewards are added to your Cashback Bonus account within two billing periods.  See Cashback Bonus Program Terms and Conditions for more information about your rewards.

Amazon is not a sponsor of this promotion. Amazon, the Amazon.com logo and the smile logo are trademarks of Amazon or its affiliates.

PayPal: PayPal, the PayPal logo are trademarks of PayPal or its Affiliates. Listed merchants are in no way sponsoring or affiliated with this program.

Cashback Match: We’ll match all the cash back rewards you’ve earned on your credit card from the day your new account is approved through your first 12 consecutive billing periods or 365 days, whichever is longer, and add it to your rewards account within two billing periods. You’ve earned cash back rewards only when they’re processed, which may be after the transaction date. We will not match: rewards that are processed after your match period ends; statement credits; rewards transfers from Discover checking or other deposit accounts; or rewards for accounts that are closed. This promotional offer may not be available in the future and is exclusively for new cardmembers. No purchase minimums.

Chrome Disclosure: You earn a full 2% Cashback Bonus® on your first $1000 in combined purchases at Gas Stations (stand-alone), and Restaurants each calendar quarter. Calendar quarters begin January 1, April 1, July 1, and October 1. Purchases at Gas Stations and Restaurants over the quarterly cap, and all other purchases, earn 1% cash back. Gas Station purchases include those made at merchants classified as places that sell automotive gasoline that can be bought at the pump or inside the station. Gas Stations affiliated with supermarkets, supercenters, and wholesale clubs may not be eligible. Restaurant purchases include those made at merchants classified as full-service restaurants, cafes, cafeterias, fast-food locations, and restaurant delivery services. Purchases must be made with merchants in the U.S. To qualify for 2%, the purchase transaction date must be before or on the last day of the offer or promotion. For online purchases, the transaction date from the merchant may be the date when the item ships. Rewards are added to your account within two billing periods. Even if a purchase appears to fit in a 2% category, the merchant may not have a merchant category code (MCC) in that category. Merchants and payment processors are assigned an MCC based on their typical products and services. Discover Card does not assign MCCs to merchants. Certain third-party payment accounts and digital wallet transactions may not earn 2% if the technology does not provide sufficient transaction details or a qualifying MCC. Learn more at Discover.com/digitalwallets. See Cashback Bonus Program Terms and Conditions for further detail.

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If you prefer not to receive your FICO® Credit Score just call us at 1-800-DISCOVER (1-800-347-2683). Please give us two billing cycles to process your request. To learn more, visit Discover.com/FICO.

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Builds credit with responsible use: Discover reports your credit history to the three major credit bureaus so it can help build your credit if used responsibly. Late payments, delinquencies or other derogatory activity with your other credit card accounts and loans may impact your ability to build credit.

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