Introduction
Congratulations on graduating high school and moving on to college! Taking control of your finances at such a young age is commendable. In this blog, we will discuss the best student credit cards that can help you build credit and earn rewards. Banks have designed these cards specifically for students like you. So, sit back, relax, and let’s dive into the world of student credit cards!
Understanding Key Terms
Before we jump into the recommendations, let’s familiarize ourselves with some important terms:
- Cosign: When someone cosigns a loan or credit card with you, they become legally responsible for making payments if you fail to do so.
- Credit Score: A numerical representation of your creditworthiness that lenders use to assess your risk as a borrower.
- Hard Inquiry: A record created on your credit report when you apply for a loan or credit card, which may temporarily lower your credit score.
- Pre-approval: A process that allows you to check if you’re eligible for a credit card without impacting your credit score.
- Foreign Transaction Fees: Fees charged by banks for using your credit or debit card in a foreign country.
Getting Your First Credit Card
To get a student credit card, you must be a full-time student in college, community college, or graduate school. Additionally, you need to have a full or part-time job or someone over the age of 21 who can cosign for you.
It’s important to note that many student credit cards require good to excellent credit scores, typically ranging from 700 to 800. If you don’t know your credit score, it’s crucial to check it before applying for a card. Applying for a card that requires a higher credit score than you have can result in a denial and a negative impact on your credit score.
Top Three Student Credit Card Picks
Now, let’s explore the top three student credit cards:
1. Capital One Quicksilver Student
The Capital One Quicksilver Student card offers 10% cash back on Uber and Uber Eats. This means that for every dollar you spend on these platforms, you’ll receive 10 cents back. Additionally, you’ll earn 1.5% cash back on all other purchases. This card has no foreign transaction fees, making it a great choice for students who travel overseas. Capital One also provides a pre-approval check, allowing you to see if you’re eligible for the card without affecting your credit score.
2. Discover it Student Chrome
The Discover it Student Chrome card offers 2% cash back on gas and dining expenses up to $1,000 each quarter. You’ll earn 1% cash back on all other purchases. One notable feature of this card is the cashback match for the first year. Discover will match all the cash back you’ve earned at the end of your first year, doubling your rewards. Additionally, for the first six months, you can carry a balance on the card without paying any interest. However, it’s important to remember that it’s generally advisable to pay off your balance in full each month to avoid debt and interest charges.
3. Bank-Specific Student Cards
Lastly, it’s worth considering the student credit card offered by your current bank. Since your bank has insights into your financial history and spending habits, you may have a higher chance of obtaining a higher credit limit compared to applying with a new bank. Check your bank’s website or contact them to inquire about the student credit card options they provide.
Building Credit with Good or Excellent Scores
If you have good or excellent credit scores, you have even more options available to you. In a previous video, we discussed a credit hack that can help you establish a long credit history at a young age. This can potentially raise your credit score to over 800, making you eligible for a wider range of credit cards.
1. Capital One SavorOne Student
The Capital One SavorOne Student card is an excellent choice for college students with good credit. It offers a range of benefits, including 10% back on Uber and Uber Eats, a complimentary Uber One membership, and a $50 signup bonus. Moreover, you’ll earn 5% cash back on hotel and rental car reservations made through the Capital One Travel portal and 3% cash back on dining, entertainment, grocery stores, and popular streaming services. For all other purchases, you’ll earn 1% cash back. This card also has no annual fees or foreign transaction fees.
2. Bank of America Travel Rewards Card for Students
The Bank of America Travel Rewards card for students is ideal for frequent travelers. While it may not have as many features as the Capital One SavorOne Student card, it offers a generous signup bonus of 25,000 points if you spend $1,000 in the first 90 days. Additionally, you’ll earn unlimited 1.5% cash back on all purchases. This card also has no foreign transaction fees. Unfortunately, there is no pre-approval check available for this card, so you’ll need to apply and hope for approval.
3. Discover it Student Cash Back
The Discover it Student Cash Back card is known for its rotating categories. You’ll earn 5% cash back on different categories each quarter, up to $1,500 in spending. For all other purchases, you’ll earn 1% cash back. The categories change every three months, so make sure to stay updated. Discover also offers a cashback match for the first year, effectively doubling your rewards. While this card provides unique rewards opportunities, it’s essential to keep track of the rotating categories to maximize your cash back.
Conclusion
Choosing your first credit card is a significant financial decision. By opting for a student credit card, you can start building credit while enjoying various rewards. Remember to consider your credit score, spending habits, and personal preferences when selecting a card. If you’re unsure, consult with your bank or do thorough research to make an informed decision. Best of luck with your credit journey, and enjoy the benefits of responsible credit card usage!