Are you a student or a parent looking for a first credit card to use while in college?
Credit card issuers actually love marketing “student credit cards” as a way to build a long-term relationship with a young person. So there are options beyond the traditional “secured” cards that typically require a deposit to build or repair credit.
“Most of the big card issuers have student credit cards,” money expert Clark Howard says. “That’s because, over time, college students prove to be the most profitable credit card customers.”
Team Clark has sorted through the student credit card market and sought the expertise of money expert Clark Howard and Clark’s Consumer Action Center lead Lori Silverman to help you find the right student credit card and use it properly in your life.
Table of Contents
- Top Credit Cards for College Students
- What You Need To Know About Student Credit Cards
- Clark’s Advice for Using a Student Credit Card
- Clark’s Advice for Parents of College Students
Note: Though our analysis of the best available cards is featured first in this story, many you may benefit from reading the other sections of this article first to gather more information and advice before making a decision on a particular card.
Top Credit Cards for College Students
|OUR TOP CHOICE||RUNNER UP||HONORABLE MENTION|
|Discover it Student Cash Back||Quicksilver Student from Capital One||Bank of America Unlimited Cash Rewards for Students|
|5% cash back categories and lucrative cash back match welcome bonus.||1.5% cash back on all purchases with no annual fee.||Unlimited 1.5% back on all purchases with no annual fee.|
Team Clark spent hours reviewing the market for these cards, and we put them under the scrutiny of the guidelines for usage set by money expert Clark Howard. When curating the list, we considered factors such as annual fees, card features and each card’s path to traditional lending.
Discover it Student Cash Back
- Annual Fee: $0
- Rewards: There is one rotating 5% cash back spending category each quarter with all other purchases qualifying for 1% cash back. And there’s an unlimited cash back match bonus after the first year of card membership. So if you earn $100 in cash back with your spending, Discover will give you another $100 as a match bonus.
- Features: This card gives a $20 annual statement credit if your GPA is 3.0 or higher. You can use your cash back rewards instantly on platforms like PayPal or Amazon, or you could opt for statement credits to pay for your bill.
- Learn More
Why This Card Made Our List
This student credit card mimicks the benefits of Discover’s flagship credit card that made our list for best rewards credit cards thanks to a rotating 5% rewards structure and a generous welcome bonus that doubles the amount of cash back you’ve earned in your first year of spending.
Team Clark’s Lori Silverman says her college-aged kids have successfully applied for this card and are happy with the results. Clark says that Discover has some of the best student card offerings as a strategy to develop lifelong customers:
“One of the most aggressive players in college student cards is Discover,” Clark says. “Discover very heavily markets to new college freshmen and sends them things about their student cards. It is a great gateway to establish credit. And if you think about it, most adults don’t carry Discover cards. So Discover has looked at the student market as a way to get in with people they think in the future will be pretty affluent.”
Capital One Quicksilver Student Cash Rewards Credit Card
- Annual Fee: $0
- Rewards: Unlimited 1.5% cash back on all purchases.
- Features: No foreign transaction fees when spending outside the U.S. You’ll also get access to Capital One’s extended warranty on select purchases, travel accident insurance and complimentary concierege service.
- Learn More
Why This Card Made Our List
This card is very similar to the Quicksilver offered to non-students, as it includes most of the perks that a person with established credit history would get from Capital One.
We like it as a starter card because it gives you a set rate of 1.5% cash back on every purchase you make, which is close to the 2% back that we recommend credit card consumers seek for their everyday spender.
Bank of America Unlimited Cash Rewards for Students
- Annual Fee: $0
- Rewards: Unlimited 1.5% cash back on all purchases. You can also earn a $200 welcome bonus after making at least $1,000 in purchases in the first 90 days of your account opening.
- Features: 0% APR for 18 months on new purchases and balance transfers (must be transferred within the first 60 days; subject to a 3% transfer fee). Afterwards, the variable APR will be 18.24% to 28.24%, based on creditworthiness.
- Learn More
Why This Card Made Our List
This card is one of the best all-around student credit cards on the market. It offers a solid return of cash back, a good welcome bonus and a 18-month 0% APR period.
If you’re comfortable banking with Bank of America, you might value this card above the other two we have ranked higher on the list. However, Clark is not a fan of Bank of America in light of its track record for levying fees for simple banking practices that can be found for free elsewhere. And since this is about a student establishing a long-term relationship with a card issuer as a part of building credit, we want you to be aware that you might be better served by an online bank or local credit union for many of your banking needs.
Other Student Credit Cards To Consider
If one of our top choices doesn’t fit your needs, there are some other student credit cards available that can help you achieve your goals. However, make sure that the one you choose makes it easy to avoid fees and tracks the progress you’re making with your credit score.
Here are a few cards that just missed our Top 3 that you may want to consider:
- Discover it Student Chrome: This card offers 2% cash back on gas and restaurant and purchases. It offers many of the perks we like about the Discover it Student Cash Back including the first year cash back match.
- Capital One SavorOne Student Cash Rewards Credit Card: You can earn unlimited 3% cash back on dining, entertainment, popular streaming services and at grocery stores, with 1% on all other purchases.
- Chase Freedom® Student credit card: This card lacks a bit in the rewards space, but it does offer you a chance to start a credit relationship with Chase, which is the issuer of some of the most popular credit cards on the market. The student card has a $50 welcome bonus and a $20 annual bonus and the cash back rate is 1% on everything.
What You Need To Know About Student Credit Cards
It may seem odd that there’s a group of credit cards specifically tailored for college students since most of them have limited credit history and income resources. But Clark says that this is a group that card issuers really want.
That’s because college graduates are statistically a good long-term bet as potential high-earners who may develop into 40 or 50-year customers for the card issuer who reaches them first.
Clark says card issuers have an incentive to make this work even with customers with limited credit history. They know college students will run balances and that parents are more likely to help pay bills.
“The credit card companies are generally pretty lenient when it comes to issuing cards to people who are enrolled as full-time college students,” Clark says. “It’s in the ‘life’s not fair’ department that someone who doesn’t go to college doesn’t have that advantage, and the same is true for someone who doesn’t apply for one until after they graduate college. It’s a special leg up for people who are enrolled in college full-time.”
Here are some things to consider about student credit cards:
- They’ll Help You Build Credit: These cards are designed for the traditional college student who rolls straight out of high school and has a very limited credit history. And while it may be tempting to avoid putting a credit card in the hands of an 18 or 19 year old, Clark says there are advantages to responsibly establishing a credit existence prior to graduation. It can help get the “yes” you need when it comes time to do “adult” things like rent your first apartment or finance a vehicle.
- You May Not Need A Job to Get One: In fact, Team Clark’s Lori says that one of her kids got a student credit cards without employment. Of course, you’re still going to owe your bill each month whether they approve you without a job or not. So this may be a situation where parents take the lead on learning how to pay a bill each month. Lori developed an individualized plan for each of her kids.
- Not Everyone Can Get Approved: While the above makes it sound like card issuers are pretty liberal in their acceptance of applicants, you may find that you fall out of their parameters for a student card for various reasons. Some require that you be a full-time student, for example. Alternatives for people who cannot get a student credit card are either a starter program at a credit union or one of the secured credit cards on our list.
- They Sometimes Have More Liberal Lending Policies: Clark says the credit card companies know what they’re signing up for when they lend money to a bunch of young adults, so some issuers have developed more lenient policies on things like late or missed payments than you’d see with a typical credit card. Of course, you’ll want to read the fine print on the card so you know its fee policy before applying.
Clark’s Advice for Using a Student Credit Card
Clark believes that the responsible use of a student credit card can help young adults establish credit which can make post-graduation life easier when they apply to rent an apartment or get a car loan.
But he says you should approach the use of your student credit card cautiously and strategically because things can spiral out of control really quickly if you use the card to spend money you don’t actually have.
“College students tend to charge too much and pay too much interest. And instead of helping a credit score build, they can actually hurt a credit score by using too much of their available credit,” Clark says.
Clark’s “rules of the road” for new credit are even more rigid for new users than existing users:
- Charge a very small percentage of your available credit. Clark says you should never use more than 30% of your credit line. That can be a smaller number than you think, because students usually start with a credit line of $500, $600 or $1000. “This is going to sound crazy, but I never want you to have a closing statement balance of more than $150 on one of those $500 credit limit cards,” Clark says. “You’ve got to keep your usage ratio below 30%. And if you follow that ratio rule, you’ll help keep yourself out of trouble.”
- Avoid paying interest. “As long as you only charge on that card what you can afford to pay when that bill comes in, you’ll never have to pay interest,” Clark says.
- Use the card as a payment method only, not as “the bank.” “I want you to build that lifelong habit of using credit cards as a payment system instead of a borrowing vehicle,” Clark says. “Do that with your very first card for your very first month, and it’ll be a habit that builds over time.”
- Look to upgrade the card after your college days are done. Clark says it is fine to stick with a student card for the duration of your college experience as long as the card has no annual fee and a grace period. “Now, when you graduate, the very issuer of that card may make available to you some type of rewards card,” Clark says. “So when you graduate, you could also graduate into a card that’s going to give you a better rewards program. Once you’re out of school and in a career-type of job and you’ve developed the good habits I’ve talked about, that’s when you want to look at rewards cards as an option.”
Clark’s Advice for Parents of College Students
If you’re a parent or guardian who is trying to help your young adult get a first credit card, Clark has some advice for you as well.
“A parent has got to know their kid. You can’t be oblivious to what is going on with what you’re kids are doing with credit, Clark says. “They need your guidance, and sometimes they will also need your oversight on how you handle a card. It’s just part of the maturity process, and kids handle money differently.
“All three of my kids are completely different in how they handle money. You have to know your child as you walk them through this process.”
Team Clark’s Lori used different methods with her three kids as they went to college. Her oldest kid had trouble getting a credit card because she didn’t use a student credit card while in college, so she ended up getting a store charge card as her way to build credit.
Lori learned from that experience and helped her other two children be more proactive by applying for Discover student cards while in school.
But even that took a unique approach for each child. One child figured out the process quickly and handles payments on their own. Meanwhile, she is much more hands-on with her third child. But for her third child, Lori monitors the card and makes the payments each month.
Clark’s Advice for Student Card Alternatives
If your child cannot get approved for a student credit card or you don’t think that’s the right move for them, Clark says there are some alternatives to building credit safely while they’re at school.
“A lot of credit unions offer what’s called a ‘youth starter program,'” Clark says. “And it’s really a modified version of a secured card geared toward a college student.”
Clark says this typically requires that you post a deposit and show that your student can pay bills on time, usually for a year or so before your student can “graduate” to a normal student credit card. It’s a common gateway for credit unions, who look at college students as a potential for affluent, lifetime members.