If you are a full-time or a part-time student, you may need a credit card to make purchases online or to spread out payments for a new stack of textbooks. Student credit cards are designed specifically with students in mind and can be used to build a credit history and to earn rewards. Your credit limit may be a little lower than someone who is employed full-time, but credit card companies want to build loyalty and will offer some perks to keep your business.
Building credit as a student
While you are a student is an ideal time to get your credit history off to a good start with a credit card for students. Credit reporting bureaus will be checking to see that you pay your bills on time, stay well below the credit limit and keep a credit card account in good standing. When you do eventually get to the point of taking out a car loan or applying for a home mortgage, you're more likely to qualify for the best interest rates if you have some good solid credit history under your belt. In general, it's a good idea to keep your credit card balance at less than 50 percent of the credit limit. Better yet, pay your balance in full each month.
Student credit card rewards
The offer rewards programs. Often, these rewards programs allow you to earn points for common student purchases such as books, movies, music, gas and groceries. Some offer points for dining out, including fast food restaurants.
Rewards for good behavior
Some student credit cards encourage good financial behavior by rewarding you with bonus points or a reduced interest rate when you make on-time payments of at least the minimum and stay below the credit limit for several consecutive months. You can usually sign up for email or text alerts when your bill is due to avoid missing a payment or sending it in late.
Comparing student credit cards
To find the best student credit card you'll need to think about how you intend to use the car so you can choose the credit card features that fit your needs.
- Interest rate. Student credit cards aren't known for low interest rates. It's best to get in the habit of not spending more on the card than you can afford to pay each month. But if that's unavoidable at first, check the range of APRs offered and use a credit card payment calculator to see what your monthly payment might be.
- Balance transfer. If you already have credit card debt that you want to reduce, you may want to search for a student credit card with a balance transfer offer of zero percent for a certain time period.
- Annual fee. Some student credit cards are available without an annual fee, but those may have a higher interest rate. Be sure to compare all the features of each credit card for students to see which will be the least costly for you.
- Bonus points. Some student credit cards give you bonus points for your first purchase, spending a certain amount in the first few months or just paying on time. Look for bonus offers that match your spending pattern.
- Earning rewards. Look for the card whose rewards match your spending patterns. Read the terms of the agreement to be sure you can comply with any conditions required to earn the advertised rewards.
- Redeeming rewards. Make sure you can easily redeem rewards for what you want, whether it is cash, gift cards or plane tickets. Some rewards programs have limits and expiration dates, so read the fine print.
If you have decided you are ready to choose a student credit card, compare the offers on this page to see which one is best for you.
