The college years are a crucial period for personal growth and development, including the establishment of a solid credit profile. One effective strategy to achieve financial stability is through the responsible utilization of credit cards. Given the plethora of choices available, it can be challenging to determine the optimal point of initiation. That’s why we’ve put together this guide to help you find the best credit cards for students.
What to Look for in a Student Credit Card:
- No Annual Fee: You don’t want to be paying an annual fee for a card when you’re just starting out.
- Low Interest Rates: Since you’re new to credit, you’ll want a card with a low interest rate in case you carry a balance.
- Rewards: While not essential, earning rewards on your purchases can be a nice bonus.
- Building Credit: A credit card can be a great tool to build your credit history, so look for a card that reports to the major credit bureaus.
- Easy Approval: As a student, you may not have a long credit history, so look for cards that are geared towards students and have easy approval processes.
With these factors in mind, let’s take a look at our top picks for the best credit cards for students:
Discover it® Student Cash Back:
This card offers 5% cashback on rotating categories each quarter, such as restaurants and grocery stores, and 1% cashback on all other purchases. Discover also offers a unique feature called “Good Grades Reward,” where you can earn a $20 statement credit for every year you maintain a GPA of 3.0 or higher. Plus, Discover will match all the cashback you earn at the end of your first year.
Bank of America® Cash Rewards Credit Card for Students:
This card offers 3% cashback on a category of your choice, such as gas or dining, 2% cashback at grocery stores and wholesale clubs, and 1% cashback on all other purchases. Bank of America also offers a $200 cash rewards bonus after you spend $1,000 in the first 90 days of account opening.
Journey® Student Rewards from Capital One®:
This card offers 1% cashback on all purchases, with the opportunity to earn a higher rate of 1.25% cashback each month you pay on time. Capital One also offers free access to CreditWise, a tool to help you monitor your credit score.
Citi Rewards+℠ Student Card:
This card rounds up every purchase to the nearest 10 points, making it easier to earn rewards. Plus, you can earn 2x points at supermarkets and gas stations for the first $6,000 per year, and 1x points on all other purchases. Citi also offers a feature called “ThankYou Points,” where you can earn points for good credit behavior, such as paying on time and staying under your credit limit.
Petal® 2 “Cash Back, No Fees” Visa® Credit Card:
This card doesn’t require a credit history to apply, making it a great option for students with little or no credit history. Petal offers up to 1.5% cashback on all purchases, with the opportunity to earn higher rates over time. Plus, there are no fees, including no late fees, annual fees, or foreign transaction fees.
Building Credit
Using a credit card responsibly can help you build your credit history, which is important when you want to take out loans, rent an apartment, or even get a job. To build your credit history, make sure to pay your bills on time and keep your balance low. It’s recommended to keep your credit utilization ratio (the amount of credit you’re using compared to your credit limit) below 30%. For example, if you have a credit limit of $1,000, you should aim to use no more than $300 of that limit.
Another important factor in building credit is the length of your credit history. This is why it’s important to start building credit as early as possible. By using a credit card responsibly in college, you can start building a strong credit history that will benefit you for years to come.
Final Thoughts
Selecting a good credit card as a student can be a challenging project. However, by taking into account crucial factors such as zero annual fees, reduced interest rates, rewards, credit establishment, and simple approval, you can get a card that aligns with what you need. It is imperative to exercise caution while using your credit card by ensuring timely bill payments and maintaining a low balance to establish a solid credit profile. By selecting the appropriate credit card and exhibiting prudent financial behavior, you can establish a robust economic base for your coming activities.
