Are you a student looking to take control of your finances? Look no further! In today’s fast-paced world, having a credit card has become an essential tool for managing expenses and building credit. But with so many options out there, choosing the right one can be daunting. That’s why we’ve created this comprehensive guide to help you navigate through the sea of credit cards and find the perfect fit for your student lifestyle.
Being a student comes with many responsibilities, and managing finances is one of them. As you navigate through college or university, you may find yourself needing to make purchases for textbooks, groceries, or even travel expenses. While cash or debit cards may seem like the most convenient options, having a credit card can offer numerous benefits that can greatly help students in their financial journey. In this section, we will discuss the importance of having a credit card as a student and how it can positively impact your financial well-being.
Factors to consider when choosing a credit card for students:
Choosing the right credit card can be a daunting task for anyone, especially for students who are just starting to build their credit history. With so many options available on the market, it’s important to carefully consider certain factors before applying for a credit card. In this section, we will discuss the key factors that students should keep in mind when choosing a credit card.
1. Annual Percentage Rate (APR):
The APR is the interest rate charged on any outstanding balance on your credit card. This is an important factor to consider, as it directly affects how much you will have to pay back if you carry a balance on your card. For students who may not have a steady source of income and tend to carry balances, it’s important to choose a credit card with a low APR or, even better, 0% introductory APR offers.
2. Credit Limit:
The credit limit is the maximum amount of money that you can borrow using your credit card. It’s important for students to carefully assess their spending habits and choose a credit limit that they can comfortably manage without overspending. Applying for a higher limit may seem tempting, but remember that you will be required to pay back the amount eventually.
3. Rewards and Benefits:
Credit cards often come with various rewards and benefits, such as cashback, airline miles, or points, which can be redeemed for gifts or discounts at partner merchants. As a student, it’s wise to choose a credit card with rewards and benefits that align with your lifestyle and spending habits. For example, if you frequently shop at a particular store, look for a credit card that offers cashback or discounts at that store.
Credit cards may come with various fees, such as annual fees, late payment fees, and foreign transaction fees. It’s important to understand these fees and choose a credit card with the lowest possible fees. Students should also be aware of the penalty for making late payments and try to avoid them by setting up automatic payments or reminders.
5. Credit History Requirements:
As a student, you may not have an established credit history yet, which can make it difficult to qualify for certain credit cards. Look for credit cards that are specifically designed for students or those with no credit history. These cards typically have lower credit score requirements and can help you start building your credit.
Types of Credit Cards for Students:
When it comes to choosing a credit card as a student, there are various options available on the market. Each type of credit card offers different benefits and features, catering to the specific needs of students. In this section, we will discuss the different types of credit cards that are suitable for students.
1. Student Credit Cards:
As the name suggests, these credit cards are specifically designed for students. They have lower credit limits and come with features that cater to the financial needs of students. These include low or no annual fees, cashback rewards on everyday purchases such as groceries and gas, and incentives for good grades. These cards also offer low interest rates, making them ideal for students who may not have a steady income or a strong credit history.
2. Secured Credit Cards:
Secured credit cards require a security deposit as collateral in case the cardholder defaults on payments. This makes them an excellent option for students with limited or no credit history, as they can build their credit score by making timely payments. Some secured cards also offer cashback rewards and other incentives similar to traditional student cards.
3. Prepaid Debit Cards:
Prepaid debit cards function similarly to regular debit cards but do not require a bank account. As such, they do not contribute towards building one’s credit score but can be used at most places that accept debit or credit card payments. These can be useful for students who want to limit their spending since prepaid debit cards only allow you to spend what is loaded onto them.
4. Store Credit Cards:
Store credit cards are often offered by retail stores and can only be used for purchases at that specific store or chain. These cards may offer discounts or rewards for shopping at the store, making them attractive to students who frequently shop there. However, they usually come with high interest rates and fees, so it’s important to use them responsibly.
5. Joint Credit Cards:
Some credit card issuers allow students to apply for a joint credit card with a parent or guardian. This allows the student to benefit from their co-signer’s good credit history and also helps them build their own credit score. However, both parties are responsible for any charges on the card, so it’s crucial to make payments on time.
Comparison of the Top Credit Cards for Students:
When it comes to choosing a credit card as a student, there are numerous options available on the market. Each credit card has its own benefits and features, making it essential for students to compare them before making a decision. In this section, we will provide you with a detailed comparison of the top credit cards for students, including their key features, rewards program, fees, and eligibility requirements.
1. Discover it: Student Cash Back
Discover It Student Cash Back is one of the most popular credit cards among students due to its generous cashback rewards program and no-annual fee policy. It offers 5% cash back on rotating categories such as gas stations, grocery stores, restaurants, and Amazon.com, up to $1,500 in combined purchases each quarter. Additionally, you can earn unlimited 1% cash back on all other purchases. This card also comes with a unique feature called Good Grade Reward, where students can get $20 in statement credit every year they maintain a GPA of 3.0 or higher.
2. Bank of America Travel Rewards Credit Card for Students
This credit card is an excellent choice for students who frequently travel or study abroad, as it offers unlimited 1.5 points per dollar spent on all purchases with no foreign transaction fees. The points earned through this card can be redeemed towards flights, hotels, vacation packages, or even used as statement credits for eligible travel purchases.
3. Citi Rewards+ Student Card
If you are looking for a simple and straightforward rewards program without any category restrictions, the Citi Rewards+ Student Card could be a good option. It offers 2X ThankYou points at supermarkets and gas stations for the first $6,000 per year and 1X points on all other purchases. Additionally, this card rounds up your points to the nearest 10 on every purchase, making it an ideal choice for students who make frequent small purchases.
4. Capital One Journey Student Credit Card
The Capital One Journey Student Credit Card is designed specifically for students with little or no credit history. It offers 1% cash back on all purchases, and if you pay your bill on time, you can earn an additional 0.25% cash back for that month. This card also has no annual fee and offers access to a higher credit line after making your first five monthly payments on time.
5. Deserve an EDU Mastercard for Students
The Deserve Edu Mastercard for Students is another excellent option for international students, as it does not require a Social Security Number to apply. It offers unlimited 1% cash back on all purchases and comes with no annual fee or foreign transaction fee. This card also provides cellphone protection of up to $600 when you pay your cellphone bill with this card.
While there are numerous credit cards available for students, the best one for each individual will vary depending on their unique circumstances. It is crucial to research and compare different options carefully before making a decision. With responsible usage, a credit card can be a valuable tool for students to build credit and manage their finances. Remember to always use credit cards wisely and stay within your means to avoid any long-term financial consequences.