Best Student Credit Cards

If you’re in college and starting your financial life, a good student credit card can give you a head start in building your credit. If you pay your bills on time and borrow responsibly, the positive credit history you build now will pay off when it’s time to buy a new car, finance your first home or apply for a more exclusive credit card.

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Best Student Credit Cards (6)

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What is a student credit card?

Student cards are special credit card products that are usually only available to students enrolled in college or university. They’re designed for people with little to no credit history, which is common among college students who haven’t had many opportunities to establish credit yet.Don’t assume that you need to get a student credit card just because you are a student — it is possible to get other cards with little or no credit, like secured credit cards. But you also may be able to get a the best cash back credit cards or travel credit cards, especially if you have established some credit already.

Why college students should have a credit card?

Adulting is hard. Don't make it harder than it has to be. Pay your bills on time. Don't take out more student loans than you have to. And for heaven's sake, get a credit card and take care of it. Here, we look at some pretty good reasons for getting a credit card.

Reasons to get a credit card

1. Build credit.

The easiest and fastest way to build credit is with a credit card. You can do it other ways, such as on-time payments of a student loan, but scoring models particularly love it when you use a credit card properly. Within a few months, you can build your credit, getting you ready to buy that sweet, sweet ride, to rent your dream apartment or even to take out a mortgage. Want to bypass getting a card? Know that you may delay building your credit to the best score you could otherwise get.

2. Build habits.

It's a good idea to have a credit card to practice on. With a student card, you can get in the habit of paying in full and on time each month, getting your score closer to your goal with each month. Also, you can practice using rewards, building your points or cash back with every purchase. Finally, by having a credit card, you can get in the habit of simply using it each month, whether for a gym membership, at restaurants or each time you get gas – because, remember, you want to make sure you keep the account active, so that your good credit habits are showing up on your credit reports.

3. Enjoy convenience.

One of the best reasons for getting a credit card is for the convenience. Rather than getting loaded down with a heavy wallet or bulky purse, sometimes it's nice to just have your keys, card and driver license. Just think – you can pay at the pump, at Starbucks or through the drive-thru in a flash. While there are a few occasions when cash is needed, credit cards are king when it comes to ease of use, particularly when shopping online.

Adulting is hard. Don't make it harder than it has to be. Pay your bills on time. Don't take out more student loans than you have to. And for heaven's sake, get a credit card and take care of it. Here, we look at some pretty good reasons for getting a credit card.

4. Get an upgrade.

Many student credit card accounts can eventually be upgraded, pending good credit history. If you behave responsibly, you can get an increase in your credit limit, or even have a secured account transferred to an unsecured account, meaning your deposit is refunded or put toward your balance.

Can you upgrade a student credit card when you graduate?

Yes. If you use your card responsibly and pay your card every month on time, banks will absolutely upgrade your account to a regular credit card.

Even before you graduate, many banks will automatically give you a chance to increase your credit limit after three to 12 months of responsible use. If they don’t, you can easily call and ask.

The same goes for upgrading your account after you graduate. Some banks will upgrade your card automatically, others will gladly do it when you ask (as long as you’ve been paying on time and aren’t dangerously close to your credit limit).

Selection criteria: what makes a great student credit card?

The best credit cards for students will build credit while costing you nothing, and actually saving you money through rewards and extra benefits. Here are some things to consider:

1. Annual fee: If you’re new to credit cards, you’ll probably want to start with a card that doesn’t have an annual fee. Sometimes, paying an annual fee can be worth it to get extra benefits. But when you’re just getting started you can stick to the basics and find a card that won’t cost you anything just to have. Luckily, student credit cards don’t usually have an annual fee.

2. Rewards program: Some student credit cards earn rewards, and credit card rewards programs vary. For example, some cards provide a flat cash back rate, like 1%, on all purchases. Other cards give more rewards in certain categories, like 3% cash back at gas stations, as the BankAmericard Cash Rewards for Students does. Sometimes, the categories that earn more rewards rotate, like with the Discover it. Consider what categories you spend the most money in to determine what card would allow you to maximize rewards. If you can’t get approved for the most rewarding card, however, it’s not a huge deal because you can still build credit with any card. Then you can apply for a more rewarding card in the future.

3. Extra benefits: Many credit cards come with extra benefits, like extended warranties on purchases. These are usually pretty similar from one card to the next, so it might not factor into your decision of what card to apply for. But you should still look over the benefits of any card you’re considering so you can figure out how to make the most of it.

4. Free credit monitoring service: Many credit card issuers today offer a free credit monitoring tool, which is very useful for anyone working to build up their credit. This will typically be a FICO 8 Credit Score, but sometimes a VantageScore 3.0. In either case you can monitor that score and learn how to improve your credit over time.

5. Interest rate: NOT! We recommend you pay your balance in full every month. If you do that the interest rate doesn’t matter, since most credit cards provide a grace period and won’t charge any interest as long as you pay in full. Many people consider interest rates when shopping around for credit cards, but that assumes you’ll be carrying a balance for a long period of time. There are other factors to consider before the interest rate if you’re not going to carry a balance. Sometimes emergencies happen and you might have to carry a balance, but in that case you should be paying it off aggressively, to get back to being interest-free.

6. Ability to study abroad: Traveling outside the country to further your education and broaden your horizons? Use a credit card with no foreign transaction fees so you won’t be charged extra for every purchase. Some cards charge a fee of up to 3%, and that’s a cost you don’t need to pay if you have the right card.

How to make the most of your student credit card?

Excited but nervous about your new card? That's normal. By taking prudent steps and making sure you stay focused on building credit, you'll be fine. Here's what you need to know:

1. Stay within your limit.

Yes, you may have a $1,000 credit limit, but you can eat that up quickly with a weekend trip or a few nights' entertainment. But it's important to make sure you don't go over your credit limit, because it can trigger a fee, although some, such as the Deserve Edu, don't charge an over limit fee.

2. Pay in full.

One of the things scoring models track is how much available credit you have. The more the better. The best way to keep your balance low is to pay your card bill in full each month.

Another reason to pay in full each month: You will be able to avoid paying interest charges, which are incurred when you carry over a balance.

3. Pay several times a month.

Because you don't know when the card issuer will send your information to the credit bureaus, there is the risk that you will not have paid off a high charge yet, even though you pay in full before the due date. The trick around this is to pay in full 2-3 times a month. That way your credit utilization ratio stays low.

Your credit utilization ratio is the amount you owe by the available credit you have. So if you have $1,000 in available credit, and you owe $100, your ratio is 10%.

Anthony Sprauve, spokesman for myFICO.com, says people with scores of 750 and above use an average of 7% of their available credit. Although those with higher credit scores tend to have higher credit limits, it is still an important lesson to learn. Sprauve says:, "If people stay somewhere between 10 and 20 percent range, that's a good place to be." By utilizing less of your credit limit, you're indicating that although you use credit, you're not overly reliant on it.

4. Pay on time.

Pay late, and you can end up paying a late fee and even eventually getting your account closed. Add to that, every late payment goes on your credit report and stays there for 7 years. The easiest thing to do is to simply pay on time each and every time.

5. Make sure you use your card.

Don't get lulled into bad advice and put your card in your sock drawer. If you want to build your credit, you have to use the card. Why? Because the card issuer might close the account for lack of use. If you're worried about going over budget, use your card for a single purchase each month, such as a recurring bill, and put it on auto debit. Just make sure the bill is paid each month.

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