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Best Credit Cards for Students

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Best Credit Cards for Students:

  • Discover It® Card for College Students
  • Bank of America® Cash Rewards
  • Capital One® Secured Mastercard®
  • Discover it® Secured Card

Don’t forget to check out a full list of Benzinga’s recommendations for best credit cards this year.

Choosing a Credit Card

If you’re a college student, you have a few strikes against you in the credit card department. Lack of income and lack of credit history are two major hurdles you’ll have to jump across if you’d like a credit card in their pockets.

In the past, a college student could get a credit card without verifiable income or even a co-signer. However, now, the Credit Card Accountability Responsibility and Disclosure (CARD) Act of 2009 stipulates that credit card companies must verify a student’s income before granting them a credit card.

Anyone under the age of 21 must prove that they have an independent income or get a co-signer before applying for a credit card. It goes without saying that if you’re a student looking for a credit card and you can’t get a co-signer and/or don’t have a job, you may just be out of luck.

In addition, the CARD Act prohibits excessive marketing to young people. For example, the Act also specifically prohibits credit card companies from mailing offers to consumers under 21 unless they “opt in.” Credit card companies also cannot tantalize students with T-shirts, free pizza or other free gifts at university-sponsored events.

Challenges for Students

Credit cards are an outstanding way for you to begin building credit, learn what the heck a FICO score is and build ample experience with regard to financial responsibility. In addition, another major benefit is that credit cards offer better consumer protection and, in many cases, zero liability in case of fraud.

However, if you do fit the bill as a picture-perfect credit card candidate as a student, there are some challenges that exist if you’ve got big plans to wield the almighty plastic.

There’s no question, college students get a bad rap when it comes to credit cards. The media decries, en masse, college students’ woeful inability to stay out of credit card debt.

Therefore, it goes without saying that the following unwritten credit card rules are important to follow. As a college student, it can be tough to hold fast to these rules, but learning how to handle a credit card the right way is the first step as a young person toward building a lifetime of excellent credit. Here are the “rules”:

  • Read the fine print on your credit card terms and conditions.
  • Don’t pay your credit card late.
  • Don’t max out your credit card.
  • Don’t completely miss a payment.

Best Credit Cards for College Students

College students should look for credit cards meant for those with limited credit history. Benzinga recommends these two credit cards for college students:

Best College Student Credit Cards of 2020 - CreditCards.com

1. Discover it® Card for College Students

  • Credit Need: Limited History
  • Annual fee: No annual fee
  • APR: 10.99% intro APR for six months on balance transfers, 14.24%-23.24% standard variable APR applies.
  • Cash back rewards for good grades ($20 cash back each school year your GPA is 3.0 or higher)
  • 5% cash back rewards
  • Discover will match all the cash back you’ve earned at the end of your first year, automatically.
  • APR for cash advances: 16.24% to 26.24%, based on creditworthiness.
Bank of America® Cash Rewards Credit Card with 3% Choice ...

2. Bank of America® Cash Rewards

  • Credit Need: Limited History
  • Annual fee: No annual fee
  • APR: Introductory 0% APR for your first 12 billing cycles for purchases, and for any balance transfers made within 60 days of opening your account. After that, a variable APR at 14.24% to 24.24% will apply.
  • 1% cash back on every purchase
  • 2% cash back at grocery stores and wholesale clubs
  • 3% cash back on gas for the first $2,500 in combined grocery/wholesale club/gas purchases each quarter
  • $150 online cash rewards bonus offer after making at least $500in purchases in the first 90 days of opening the account.
Build Credit with a Secured Credit Card | Capital One

3. Capital One® Secured Mastercard®

  • Annual Fee: $0
  • Purchase APR: 24.99% variable
  • APR for cash advances: 24.99% variable
  • Cash advance fee: 3% (minimum $10)
  • Penalty APR: None
  • Late payment fee: Up to $35

Discover it® Secured Card allows cash back rewards on every purchase with 2% cash back on restaurant or gas purchases and an unlimited 1% back on everything else. Also, you get a dollar-for-dollar match of all the cash back you’ve earned–automatically–at the end of your first year.

As you’re researching cards, you’ll notice that most secured credit cards don’t have rewards programs, so Discover it® Secured Card’s $0 annual fee, plus rewards, are icing on the cake.

Discover.com - Apply for Discover it Secured Credit Card

4. Discover it® Secured Card

  • Annual fee: $0
  • Monthly fee: $0
  • Purchase APR: 24.24% variable
  • APR for cash advances: 26.24%
  • Cash advance fee: Either $10 or 5% of the amount of each cash advance, whichever is greater
  • Penalty APR: None
  • Late payment fee: Up to $35

How to Apply for a Credit Card

The quickest way to apply for a credit card is to apply online. You’ll find out if you’ve been approved within minutes of applying.

Whatever you do, don’t apply for ten different credit cards all at one time. Because you’ll have done careful research (right?) and know which cards you’ll likely be approved for, you’ll want to apply for one at a time. Too many inquiries can damage your credit score.

Under 21?

The Credit Card Accountability Responsibility and Disclosure (CARD) Act of 2009 requires students to be 21 before being granted a credit card. However, there are plenty of students who aren’t yet 21 but who need a credit card. Here are two ways to make that happen:

  1. Become an authorized user. If your parents or guardian have a credit card, you can be added as an authorized user on the account. An authorized user is essentially allowed to charge the account, but cannot make changes to the account. For example, an authorized user would never be able to increase the credit limit.
  2. Get a co-signer. If your parents or guardian are willing to co-sign your credit card application, that means that they’re willing to take the responsibility if you neglect to pay the bill on time. However, both parent and students’ credit score can become damaged if this happens. Undoubtedly, it can be a risk for parents if their student is a little less responsible than average.
  3. Prove you earn a steady income. If you can prove you earn an income, then it’s possible you could be granted your own card. Again, don’t apply for too many cards at one time, and note that income for students could go beyond just personal income; it can come in the form of grants or scholarships as well.

Bonus Option

For students who are having a hard time getting approved for student credit cards or other types, it’s possible that a secured card is the way to go.

A secured card requires a cash collateral deposit to go in the credit card account, and that becomes the actual credit line for the account. For example, if you save up and put in $600 into the account, you’ll be able to charge up to $600 on the secured card.

If you need to build or rebuild credit, the Capital One® Secured Mastercard® is a great option. Its $0 annual fee, almost-automatic credit increases (once your monthly payments are made) and built-in spending control options all spin your bad credit into a positive direction.

In addition, you’re able to watch the positive steps you’ve made by monitoring your credit profile and credit score.

Final Thoughts

As a student, it’s definitely possible to find a credit card option that fits your age, credit history, inexperience and income levels. It’s a matter of knowing what’s out there as an option that will help you determine what type of credit card a company will approve for you.