How to choose the best student credit card
Quick insights
- Student credit cards may enable you to build credit while earning rewards on everyday purchases.
- Looking for a card with a low annual fee may help you stay within your college budget.
- Using your card responsibly and making on-time payments may help you qualify for future credit limit increases.
Choosing a credit card is an exciting step toward financial independence. If you are looking for a student credit card, it may be helpful to know which features matter for your goals.
A credit card may help you establish a financial track record while providing useful rewards for your daily life. With a little guidance, you could find a card that helps you build credit without overcomplicating your budget.
Things to look for in a student credit card
When you compare different student credit cards, you may want to focus on costs and how the card helps you build credit. Since students may have a limited budget, a card with a low annual fee—the yearly charge you pay for having the account—is often a factor. Additionally, comparing cards with a low annual percentage rate (APR) or a promotional offer may help you save on interest charges if you carry a balance.
It can also be helpful to check if the card issuer reports your activity to the three major credit bureaus: Experian™, Equifax® and TransUnion®. A credit bureau is a company that collects information about how you use credit to help calculate your credit score. This number helps assess your creditworthiness and is one of several factors lenders consider when making a lending decision.
Common student credit card features and benefits
Student credit cards sometimes come with unique perks that may help you save money or earn rewards while you shop. Let’s take a look at some common credit card features and benefits below:
- Rewards: You may earn a percentage of your money back in the form of cash back or points on eligible purchases like books or groceries. These rewards can help offset some of your college expenses over time.
- No foreign transaction fees: If you plan to study abroad, you may want to look for a card that doesn’t charge extra for purchases made in other countries. A foreign transaction fee is typically a small percentage of a purchase made in a foreign currency or outside the U.S.
- Higher credit limits: Some cards offer a path to a higher credit limit after you make several on-time payments. A credit limit is the maximum amount of money you can spend on your credit card at one time.
- Educational resources: Some issuers provide tools to help you track your financial profile and learn about responsible money management habits.
How to apply for a student credit card
Before you start your student credit card application, it can be helpful to have your personal and financial information ready. Lenders typically ask for your Social Security number, proof of address and details about your annual income or monthly housing costs. Having these details on hand can make the process smoother.
If you’re under 21, you may need to show proof of independent income to qualify for a card on your own. Another option, depending on the credit card issuer, is to add a cosigner, which is a person who agrees to take responsibility for payments if you are unable to make them. If you cannot qualify for your own account yet, you may also consider becoming an authorized user on a parent's account to start your journey.
In conclusion
Selecting a student card typically requires finding a balance between costs and benefits. Establishing responsible habits today—like using your card for planned purchases and paying your bills on time—may lead to a strong profile over time.
