Tracing their history back to the mid-20th century, credit cards enable users to pay for goods and services or receive a cash advance. Cardholders can tap into their line of credit as long as they repay the owed amount plus collateral charges. Because this system allows individuals to effectively pay for large purchases in installments, credit cards have become a widespread financial tool in the United States. According to Gallup, the average American possess at least two credit cards.

To qualify for a credit card, applicants need to be at least 18 years old. However, individuals 21 and younger must demonstrate a reliable source of income before they can obtain a credit card. This income can come from a full- or part-time job, as long as the amount the user earns allows them to pay the card's balance. If a candidate does not have an adequate income, they can still apply for a joint credit card (usually with a parent or guardian). Card issuers also look at the applicant's level of debt and their credit history when evaluating suitability.

This guide will help you discover the best credit cards for college students with respect to accessibility and overall benefits. You'll learn how to establish and maintain a good credit score, which can help you obtain loans for college, cars, and housing. It will also explore common credit card mistakes and how they affect financial stability, as well as how student credit card users can manage their debt and accrue savings.

Ranking

The following list contains the five best credit cards for college students, taking into account application requirements, annual fees, international fees, and rewards. Because student credit cards target young users, it's important that they offer a reasonable annual percentage rate (APR), also referred to as interest rate. Introductory APR represents the interest charged during the first few months of use, and standard APR is the interest rate thereafter. Transfer APR is the interest users pay when transferring debt from another card.

1. Discover it® Student Cash Back
  • Purchase Intro APR: 0% for six months
  • Transfer Intro APR: 10.99% for six months
  • Standard APR: 15.24-24.24% variable
  • Annual Fee: N/A
  • Rewards: 5% cash back on differing purchases each quarter
  • International Travel Fees: N/A

One of the best credit cards for college students, this Discover option gives users 5% cash back on designated purchases every quarter and 1% cash back on all other purchases automatically. Holders do not garner a fee for their first late payment, and late payments never increase the standard interest rate.

Pros Cons
  • Great cash-back incentives
  • As an added bonus, Discover matches the user's total cash-back earnings at the end of their first year
  • Discover is not as widely accepted as Visa or Mastercard
  • Activating the 5% cash-back bonus each quarter can prove a hassle
2. Deserve Edu Mastercard for Students
  • Purchase Intro APR: N/A
  • Transfer Intro APR: N/A
  • Standard APR: 20.99% variable
  • Annual Fee: N/A
  • Rewards: 1% unlimited cash back
  • International Travel Fees: N/A

This Mastercard is a great option for international students, since the application does not require a social security number or credit history. Cardholders enjoy 1% unlimited cash back on all purchases. By making prompt payments, student credit card users can upgrade to the Deserve Pro MasterCard, which offers 3% back on entertainment and travel, 2% on restaurants, and 1% on all other purchases.

Pros Cons
  • Application requires only passport, student visa, I-20 form, and a U.S. bank account balance
  • One year of Amazon Prime included
  • No introductory APR offers
  • Does not allow cash advances
3. Journey® Student Rewards From Capital One®
  • Purchase Intro APR: N/A
  • Transfer Intro APR: N/A
  • Standard APR: 26.96% variable
  • Annual Fee: N/A
  • Rewards: 1-1.25% cash back on all purchases
  • International Travel Fees: N/A

Boasting remarkable flat-rate rewards, this Capital One option is one of the best all-around credit cards for college students. Users can boost their 1% cash-back rate to 1.25% by paying their bill on time. After the fifth prompt payment, Capital One increases the cardholder's credit line. These incentives make it easy for students to develop good credit card habits and raise their FICO score.

Pros Cons
  • Simple rewards make the card easy to use
  • Escalating incentives reward healthy spending and payment habits
  • No introductory APR offers
  • Steep APR makes it risky to accrue high balances
4. Capital One® Secured Mastercard®
  • Purchase Intro APR: N/A
  • Transfer Intro APR: N/A
  • Standard APR: 26.99%
  • Annual Fee: N/A
  • Rewards: N/A
  • International Travel Fees: N/A

Secured credit cards require candidates to furnish a security deposit, which becomes their credit line and prevents them from spending more than they can afford. The Capital One option offers a $200 limit, making it a great starter card for students who have no credit history or a poor credit score. After making five timely payments, cardholders receive an automatic credit line increase without needing to add to their deposit.

Pros Cons
  • Great option for students who want to build credit
  • No fees on balance transfers or cash advances
  • No introductory APR offers or rewards
  • Steep APR makes it risky to accrue high balances
5. Bank of America® Travel Rewards credit card for Students
  • Purchase Intro APR: 0% for 12 billing cycles
  • Transfer Intro APR: N/A
  • Standard APR: 17.24-25.24% variable
  • Annual Fee: N/A
  • Rewards: 1.5 points for every $1 spent
  • International Travel Fees: N/A

This Bank of America option suits experienced student credit card users who want to funnel their rewards into travel. On top of the 1.5 points garnered from everyday purchases, students can earn 25,000 bonus points by spending $1,000 during the first 90 days. Cardholders can redeem points for cash back, gift cards, or travel. As an added incentive, students receive three points per dollar when booking their trips through the Bank of America Travel Center.

Pros Cons
  • One of the best sign-up bonuses for a card with no annual fee
  • Students who have a Bank of America checking or savings account enjoy a 10% bonus on the base points. This perk allows users to earn 1.65 points for every dollar spent.
  • Steep APR makes it risky to accrue high balances
  • Students with no credit history or low scores cannot qualify for this card

Expert Interview

R.J. Weiss

R.J. Weiss

Certified Financial Planner

R.J. Weiss is a certified financial planner and founder and editor at the popular personal finance site The Ways to Wealth. Since 2017, over 4 million people have visited The Ways To Wealth to learn better ways to make money, save money, and invest it wisely. R.J. currently lives in Geneva, IL, with his wife and three kids.

When is the right time for students to consider applying for a credit card?

As a credit card can help build credit history, and therefore save someone money down the road, it's a good idea to get a card upon entering school. With that said, it's wise to have a low credit limit and only put enough on the card that it can be paid off every month.

Do you think it is important for all students to have a credit card?

While there are benefits to having a card early, it can be a smart decision to delay getting a card. Just as good credit card management can build your credit history, bad credit card management can hurt it.

What are the most important things students need to know before they begin a credit card application process?

As the average length of credit is a factor in one's credit score, the goal is to choose a card that you'll keep for a while. As such, it's best to choose a card with no annual fee from a large bank.

Before you apply for a card, have a plan on how you'll use it. A student should have a budget for the maximum amount they'll put on the card as well as how they will pay it off every month.

What budgeting resources do you suggest students utilize?

Free budgeting software that automatically syncs with your financial accounts, like Mint and Personal Capital, is a very useful way to track income and expenses. The goal is to know where your money is going and whether you need to adjust your spending going forward.

What are some common misconceptions students have about credit cards?

It's not just about having a credit history -- it's about having a good credit history. Every student should understand what goes into their credit score and what they can do to improve it.

If a student is in debt, what are the first steps you suggest they take to ensure that they are able to pay it off?

When a student is in debt, priority number one is to not go further in debt. As such, a student should stop using their credit card until they're able to pay their balance in full, even going as far as giving that card to their parents or a sibling. Once eliminating the chance of going further into debt has been accomplished, a plan needs to be put in place to pay off that debt -- specifically, what will change going forward in regards to income and expenses to help pay off the debt as fast as possible.

Understanding Credit

Unlike debit cards, which draw directly from a user's bank account, and charge cards, which require holders to pay off their entire bill each month, credit cards effectively allow users to borrow large amounts of money and repay the debt over time. In the U.S., four networks dominate the payment card industry: Mastercard, American Express, Visa, and Discover. Credit card networks do not provide funds or set interest rates. They also do not determine rewards or annual fees. Instead, these networks connect users to banks, lenders, and merchants. Some credit card networks offer distinct perks, including purchase protection, damage waivers for rental cars, and even VIP airport lounge access.

You'll need to understand interest rates, or APR, to properly manage student credit cards. Interest is how much it costs to borrow money from issuers. On top of introductory, standard, and transfer APR, consider the interest rates associated with cash advances and late payments. Unchecked interest charges are one of the major causes of credit card debt, because once a user starts paying interest, that number compounds daily. This means that if you don't pay toward your card in a given month, the next month you'll owe that balance, plus the interest on the balance. It's easy to see how credit problems can snowball.

To avoid debt, you'll need to prioritize paying off your bills as soon as possible. Prompt payment also contributes to a good credit score. This valuable number derives from an individual's credit history, which includes their ability to pay debts. Credit history also contains characteristics like amounts currently owed, amount of total available credit, and the number and types of credit accounts. Furthermore, timeline factors heavily into determining credit scores. Users with long credit histories who demonstrate consistent responsibility in paying their debts enjoy favorable assessments.

In general, the higher an applicant's credit rating, the more they money can borrow at lower interest rates.

A strong credit history and score enable you to qualify for bigger credit lines and apply for better credit cards, as lenders will see you as a safe bet. Credit score also comes into play when it's necessary to borrow money for large expenses, like purchasing a home. In general, the higher an applicant's credit rating, the more they money can borrow at lower interest rates.

When applying for a home mortgage, credit score affects down payment. For example, a loan from the U.S. Federal Housing Administration requires candidates with credit scores between 500 and 579 to put down 10% of their home's value. Candidates with scores of 580 or higher need to furnish only a 3.5% down payment. Individuals with scores below 500 usually do not qualify for an FHA loan. Like any other debt, home mortgages affect credit scores, prompting borrowers to pay on time each month.

Student credit cards provide the foundation for building a good credit history, as long as you avoid high balances and late payments. Stick to a monthly budget and make punctual payments as close to the balance as possible. On the standard 300-850 scale, a credit score of 700 or above is considered good. Students should note that it takes time to grow this number. Similarly, they can often fix bad credit scores by locating errors in their history and consistently paying down balances.

How to Maintain a Good Credit Score

Banks and other issuers deliver a variety of good credit cards for students, offering low and fixed APRs as well as minimal fees. By carefully managing your spending, you can build a good credit score. The following section provides the tips you need to establish healthy fiscal habits and avoid common mistakes.

Check Your Credit Score

FICO, the major U.S. credit reporting and data analysis company, established its Score Open Access program in 2013. This program partners with over 170 financial institutions to offer free credit scores to consumers, including Discover, Chase Bank, Citibank, and HSBC. Even if your credit card company does not partner with FICO, they may still offer free scores upon request.

Student cardholders can receive FICO-affiliated credit reports from Equifax, Experian, and TransUnion. These vendors provide free reports every 12 months. Note that a credit report does not always include a credit score. In fact, all three of these companies charge you about $20 to see your score. If your bank does not participate in the FICO program, it might be beneficial for you to pay for official scores from one of the aforementioned vendors.

Alternatively, you can take advantage of applications from companies like NerdWallet, which offer not only free credit scores but also credit monitoring services. However, these numbers may not match official FICO results, since there are several ways to calculate credit scores. If you need your score for a specific purpose (like buying a home), you should inquire with your realtor and mortgage lender about what credit score they prefer.

Establish Good Credit Card Habits

You should develop good credit habits as soon as you receive your first card. By cultivating these healthy behaviors, you'll build a strong credit score that allows access to better personal, auto, and home loan rates. High scores also yield bigger credit lines and approval rates, offering invaluable flexibility when the unexpected occurs.

  • Pick the Right Card: Many individuals overcrowd their wallet with excessive numbers of credit cards and lose track of their spending. You should identify 2-3 cards that bring the most value and spread your spending among these accounts to maximize rewards. If you have too many cards, you can choose from two options: you can either lock unused cards away or close these accounts. Note that closing credit accounts negatively impacts FICO scores, so stagger terminations over several months.
  • Stick to a Budget: Student credit card users should create a budget by identifying how much they can spend each month based on their income. The 50/30/20 rule represents a popular framework in which you spend 50% of your earnings on needs, 30% on wants, and 20% on savings and debt. Tracking is an important step to maintaining a budget. It's easy to neglect, but you can pair budget check-ins with a weekly task (like grocery shopping or laundry) to turn budgeting into a habit.
  • Pay off Debt: By paying credit card bills in full, you avoid interest and late payment penalties. You can program a phone or email reminder to ensure you submit payment on time. You can also set up autopay, assuming you are not in danger of an overdraft. You can pay your debt weekly, which allows you to better monitor spending. Big balances can overwhelm you, so break the task into small, manageable goals. Establish a stable payment plan that allows you to minimize late fees without upending your budget.

Common Mistakes

If you want to develop good habits, begin by identifying major student credit card mistakes. Little bad habits are easy to fall into and can lead to bigger errors. They also quickly escalate into debt and other long-term financial problems. Fortunately, you can easily avoid common missteps once you learn about them.

Misunderstanding Credit Card Terms

Many students apply for credit cards for their availability and perks without delving into the terms and conditions. For example, companies that offer zero or low APR routinely place a time limit on this perk, which can lead to you paying high interest rates without realizing it. You should review terms at least twice a year. You can find this information by contacting the issuer or consulting their website.

Maxing out Credit Cards

Student credit card users should not treat their credit lines as free money. By maxing out your credit limit, you damage your FICO scores and put yourself in danger of overdraft fees and penalty interest rates. As a rule of thumb, you should charge only up to 30% of your maximum allowance. Avoid withdrawing cash from your credit card, since issuers charge hefty fees and interest rates for advances.

Paying the Minimum Balance

Credit card issuers are content to allow cardholders to pay a minimum monthly amount. However, those who do so not only increase the time it takes to erase their balance but also accrue sizeable interest charges. This bad habit creates a cycle that leads to long-term debt.

Debt Management

According to a 2018 study conducted by NerdWallet, U.S. residents owe $13.67 trillion in total debt. The average American household has $6,700 in credit card debt, and the average college graduate owes nearly $48,000 in unpaid loans. Debt conditions fuel feelings of economic anxiety and general stress. In a 2016 Experian survey, over 40% of participating college graduates reported that their financial security was either poor or modestly fair. However, 53% of respondents stated that they felt optimistic about their financial future, believing they could become debt-free with proper planning.

There are three main strategies for liquidating credit card debt. If you have just one card, the method is simple: pay off as much as you can each month until you reach zero. If you have multiple student credit cards, employ either the snowball or avalanche strategy. Both begin by making all minimum payments in a timely manner.

The average American household has $6,700 in credit card debt, and the average college graduate owes nearly $48,000 in unpaid loans.

The snowball technique prioritizes the smallest balance. After paying off that debt, you move on to the next lowest principal amount. This method is a good fit if you have several small balances and want to see progress quickly. It can feel empowering to complete a debt, helping you stay on track to continue your climb out of debt. The avalanche technique, also called debt stacking, entails paying off the credit card with the highest APR first. This strategy may yield slower results than snowballing, but it allows you to pay less interest in the long term.

You can also use the avalanche strategy to tackle other large debts, like student loans. As always, developing and sticking to a budget is the best way to navigate any form of debt. Some people choose to pay student loans with credit cards to reap membership rewards and build their FICO score. However, this method yields worthwhile benefits only if your student loan interest rate substantially exceeds your credit card's introductory, transfer, and standard APR. In most instances, you are better off seeking loan deferment or forbearance through state and federal government programs. For more information on student debt, consult this in-depth guide.

Additional Resources

Unbury.me

This innovative calculator website lets you visualize your debt, including credit card balances, student loans, and mortgages. After inputting your data, you can compare the snowball and avalanche strategies to discover which method better suits your financial situation. In addition to free usage, Unbury.me comes with a save feature that allows you to keep track of your progress.

Intuit Mint

With more than 15 million users, Mint is one of the most popular and accessible free budgeting programs available. After syncing your bank and credit card accounts, you can organize your transactions into predefined or custom categories. Mint also helps you determine and track your credit score.

Acorns

This mobile application helps you passively save money toward debt payment and big purchases. Combining a robo-advisor component with autosaving tools, Acorns rounds approved debit/credit card transactions to the full dollar and funnels that change into a computer-managed investment portfolio. The app is free for college students and does not require a minimum investment.

Consumer Financial Protection Bureau

The CFPB is a government agency that protects consumers from deceptive, unfair, and abusive financial practices. Through the Financial Coaching Initiative, you can access webinars about money management skills and debt payment plans. The CFPB also offers guidance on paying for college, using credit cards, and applying for auto loans and mortgages. Furthermore, the CFPB helps consumers work through complaints about financial services and products.

Credit Karma

A multinational personal finance company, Credit Karma provides free services to consumers, including credit scores and credit reports. Also available is a simulation tool that allows you to explore the potential effects of a financial action on your credit history. The company also connects you with personal, auto, and home loans based on your financial status and delivers comprehensive information on credit cards.

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