Patrick Beckman
Students often leave college ill-equipped to manage their finances responsibly and effectively. They aren’t taught how compounding interest works for them, that a 10% interest rate is a terrible deal, or why their credit score shouldn’t be ignored. If only they had one of the best student credit cards, they could be light-years ahead of their peers with a diploma in hand AND a great credit score.
As a student, you might be a bit tight on money and so earning some money back on all of your purchases is a great deal. Most banks offer some sort of student-focused credit card which usually earns rewards or cash back. It is a no-brainer to open one of these cards and use it for the purchases you already make on a daily basis.
Credit cards can be dangerous though, so knowing how to use it properly makes all of the difference. If used wisely, it can reap some great benefits and protect you from fraud. If used poorly, it can send you into a downward spiral of debt. The high-interest rates will creep up on you if you carry a balance over from month to month, so only spend the money you would normally spend with cash or a debit card.
No matter your situation in school, opening a credit card should be a high priority for you. Having a solid credit score (which a credit card helps build) is an absolute must for when you graduate. Check out some of our recommendations for some of the best student credit cards below.
Our Student Credit Card Recommendations
Best Student Credit Card for Travel
Bank of America Travel Rewards Credit Card for Students
If there’s one thing all college students love, it’s taking a vacation during spring break or summer vacation. Going to your favorite beach location or river spot with friends is a must during college, and the way to make your trips even sweeter is the Bank of America Travel Rewards Credit Card for Students.
This no-annual-fee card for students earns travel rewards that you can apply toward travel-related purchases you make with your credit card. The simplicity of this card makes it ideal for students who have better things to worry about than airline loyalty programs and maximizing rewards. Even better, it can make tracking your credit score simple, as it offers a free monthly FICO score.
Every time you use this card, you earn 1.5 points for every dollar you spend. There are no restrictions or limitations on which purchases earn rewards. Since each point is worth one cent towards future travel purchases, you are essentially earning 1.5% cash back to be saved in your vacation fund. Your rewards can then be used as a statement credit to offset travel purchases.
The card also features a really great sign-up bonus, which isn’t super common for starter or student cards. You can earn 25,000 bonus points if you spend $1,000 on the card within the first 90 days from account opening. That’s $250 toward your next hotel, flight, rental car, or other travel-related purchase.
Like all good travel credit cards, this card does not charge any foreign transaction fees while traveling abroad. It also features a really great 0% APR introductory period. This card does not charge interest on your purchases for 12 billing cycles. We normally don’t recommend carrying over a balance from month to month due to the outrageous interest rates charged on credit cards. However, the introductory APR period can come in handy if you need to make a big purchase and pay it off over your first year of card membership.
As a student, you should strongly consider the Bank of America Travel Rewards Credit Card for Students as your first credit card.
Best Student Cash Back Card
Discover it Student Cash Back Credit Card
The Discover it Student Cash Back Credit Card is one of the best student credit cards thanks to its generous sign-up bonus and elevated quarterly bonus categories. Depending on your spending habits with this card, you could bring in a lot of extra cash back every time you make a purchase.
This is a type of no-annual-fee card that offers bonus cash back in rotating quarterly categories. You might be thinking that Discover intentionally gives bonuses on categories that don’t see too many purchases, but you would be wrong. The categories regularly include common things like purchases made on Amazon.com, grocery stores, gas, and dining. During the holidays (October through December) they often include online shopping and department stores—the categories that see a ton of expenses during this time of year.
Each quarter, you can earn 5% cash back in the bonus categories on the first $1,500 in combined purchases. If you are able to max out the bonus category every quarter, that’s a minimum of $300 in cash back every year. All other purchases also earn 1% cash back without any limit, so you are always earning something when you shop.
The sign-up bonus on this card is not really a sign-up bonus, but it can still be extremely lucrative. At the end of your first year of card membership, all of your cash back will be doubled. So if you spend enough to get $500 cash back in the first year, you will actually get $1,000. That effectively makes the bonus categories earn 10% back, and everything else earns 2% back for the entire year.
One very unique perk with this student credit card is the Good Grade Reward. If you are able to maintain a 3.0 GPA or higher during the school year, they will give you an additional $20 statement credit. It may not be a whole lot, but $20 is definitely a nice incentive to keep your grades up. You can earn these rewards up to five years in a row.
Nobody wants to pay interest on their credit card purchases, especially since the APR on credit cards can be astronomical. Fortunately, this card offers a 0% intro APR on purchases made within the first six months from account opening. We don’t recommend carrying a balance over from month to month since the interest can build up quickly and negate any rewards you earn. But this can come in handy if you need to buy books or school supplies but don’t quite have the cash immediately. Just be sure to pay off the balance fully before the sixth month hits.
Since this is a starter student credit card, it doesn’t require a great credit score to be approved for it; you could even be approved without a FICO credit score. While you build your credit, you can keep track of your progress, as this card offers a free monthly FICO credit score.
If you like getting cash in your pocket every time you make a purchase, consider getting the Discover it Student Cash Back credit card.
Best Student Card for Commuter Students or Those with Bad Credit
Discover it Secured Credit Card
Discover really knows what they are doing when it comes to student credit cards and starter credit cards. Another great card that they offer is the Discover it Secured Credit Card. It is like other secured credit cards in that it requires a security deposit, but it’s distinctly different in that it offers some great rewards-earning.
First off, the only real downside to this card is that it is a secured credit card, which means putting down a security deposit. With the Discover it Secured card, you will need to put down at least $200 as a security deposit. The credit limit you get on the card is equivalent to the amount you put down as a security deposit. The purpose of the security deposit is to protect the bank in the event the bill is not paid—the security deposit then covers the amount owed.
Secured credit cards don’t generally offer rewards since they are intended as credit-building cards or for individuals with bad credit. However, this card offers 2% cash back at restaurants and gas stations, up to $1,000 in combined purchases each quarter. All other purchases earn 1% cash back every time you use the card. The bonus category on this card is what makes it great for students that commute to and from campus.
The sign-up bonus on this card is the same as the Discover it Student Cash Back Card for Students. At the end of your first year of having the card, all of your earned cash back will be doubled. That makes the 2% bonus category actually 4% back during the first year you have the card. You also will save on fees when traveling abroad thanks to no foreign transaction fees.
This card also comes with a free monthly FICO credit score, which can help you keep track of your credit and see how it is improving. If you manage your account well and pay all of your bills on time, you could be eligible to convert the card from a secured card to an unsecured credit card. In this case, you would get your security deposit back. You could convert it to the Discover it Student Chrome credit card, which has the same rewards earning potential as the Discover it Secured credit card.
Why Student Credit Cards are a Great Idea
As a student, you are probably trying to focus on your upcoming test, your lab report due later this week, or the plans you have with friends this month. Odds are that you aren’t thinking too much about your credit score and how that could help or hurt you down the line. It is imperative that you watch your credit closely and do everything you can to build it and protect it early—not doing so could cost you a lot of money.
Opening a credit card is the simplest way to start building your credit. And the best thing is that banks create credit card products specifically with students in mind. Credit card issuers almost always have at least one card that college students can open without any credit history or below-average credit. This is to give students a leg up when they graduate and start buying cars and houses.
Your credit score factors in a few different variables from your credit history. The biggest portion of your credit score is based on your payment history—whether you make them on time or late. Always pay on time and your score will start to climb. Next, it factors in how much of your available credit you use on a regular basis. Don’t max out your cards every month, even if you do pay them off in full.
Your score also factors in how long of a credit history you have. Keeping accounts open for long periods of time will help your score; that’s why it is important to start your credit journey as soon as possible. The last two factors are the number of recent hard inquiries on your record, meaning how often you apply to open a new line of credit, and your mix of accounts, meaning how well-mixed the types of accounts (like mortgages, installment loans, student loans, credit cards, etc) you have open are. You want to keep inquiries low and the mix of accounts high.
As you can see, opening a credit card while in college can give you the opportunity to build your credit early. The sooner you open a credit card, the sooner you can build payment history and length of credit history. So when you get to a point where a good credit score matters—like buying a house or a new car—you won’t be left wondering why your credit score isn’t very good. Having a good score when it matters can save you the hassle of being denied loans and save you money on interest rates.
Find a student credit card that works for your spending habits and start building your credit now.
