Student credit cards

Use a credit cards for students to start your credit history, get rewards, and earn cash back.

By   |   Verified by Yvonne Taylor   |   Updated 10th December 2021

Comparing student credit cards

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Overview

Using student credit cards is one of the best ways for young people to establish and start building credit. Of course, there are risks associated with getting a credit card, including overspending and missing payments. But as long as you use the card responsibly and pay back the balance on time, a credit card for students is both a convenient way to pay and a great way to build your credit score.

Student cards usually have no annual fee and lower income requirements, making them the ideal option for young people entering higher education or just starting out in the workforce. Card options are available through a number of different lenders and offer incentives like cash back, travel benefits, air miles, and other rewards.

Why you should get a student credit card

There are a number of reasons a student should consider getting a credit card. If managed properly, credit cards for students are a great way to establish a strong credit history. Having a good credit history improves your credit score, making it easier to get approved for loans and better credit cards in the future.

A second reason is that it provides you with an extra source of cash if you need it throughout the week, at a time in your life when your income may be irregular or unpredictable. Just make sure you don't spend more on the card than you're able to pay back when the monthly repayment is due, and remember that sometimes other charges like an annual fee may apply.

Credit cards designed for students usually have rewards that younger people care most about. This includes cash back percentages earned at places where they like to shop and eat, as well as point systems and discounts, and even movie tickets. Some also include a welcome bonus, such as extra points or higher cashback for a limited time.

Avoid overspending and paying interest

With your first credit card in your pocket and access to the bank's money, you need to avoid the temptation to spend more than you can repay at the end of the monthly billing period. If you can't repay the full amount, not only will you pay a high rate of interest on the balance, you will also be likely to forfeit your interest-free days on all future purchases until you have repaid the balance in full. It's all too easy to fall into debt, so you need to practice financial discipline.

Alternatives to student credit cards

Getting a credit card for student living may not be something you're ready to do quite yet. If that's the case, there are a few alternative options you can consider that give you the same convenience of using a credit card.

Prepaid card

You can buy prepaid credit cards at most large retailers. These cards can be bought with an amount already on them, or be topped up later with your own cash. You can use prepaid credit cards anywhere a normal credit card is accepted, including online and in stores. Prepaid cards have no annual fee and don't typically expire.

Debit card

A debit card works in a similar way to a prepaid card, but instead of having an amount pre-loaded on the card, it is simply linked to your bank account. As with a prepaid card, you are spending your own money rather than borrowing it, so you will be able to avoid getting into debt. Once again, there's usually no annual fee involved.

Buy Now Pay Later service

Another alternative to student credit cards is using the service of a Buy Now Pay Later (BNPL) company. This works by selecting a BNPL option during an online or in-store checkout and creating an account with a BNPL provider like Affirm, Sezzle, Klarna, Quadpay, or Afterpay. They will lend you the money you need for the purchase, with the stipulation that you pay it back through interest-free installments due on specified dates. Interest or late fees only get applied if you fail to pay or miss the due date.

Secured credit card

A secured card is the same as a traditional card, with the exception that you need to put down a deposit as security to open the account. The deposit is refundable after a certain amount of time has passed, as long as you've stayed on top of your repayments. The credit limit you have to work with on a secured card depends on the deposit amount you put down. It's a good way to build a positive credit history.

Learn about student credit cards

  • Pros & cons

  • Tips

  • FAQs

Building your credit score

One of the most important reasons to get a credit card is to establish a credit history and improve your credit score by managing your card account responsibly. The better your credit score is, the easier you'll find it to be approved for facilities like a mortgage for a house or a car loan. You'll also be able to negotiate better interest rates for your future credit cards and other borrowings.

Cash back and rewards can be lower than average

While you do get access to points programs and cash back rewards, these are often at a lower rate than typically offered with a traditional credit card issued to someone with a full-time employment income. Student cards are primarily designed to help young people get started in credit rather than deliver high rewards.

Dealing with interest rates

Interest rates can be confusing when you're just learning how cards work. The interest rate may start out lower because of a promotional offer for new cardholders, only to increase after a few months, or because you missed a payment. Cash advances usually incur higher interest charges than purchases balances do. Interest rates also vary from card to card, but one thing they have in common is that they are usually much higher than for other types of borrowing.

Easy to overspend

One of the biggest problems people run into when getting a card is overspending. The last thing you want to do is spend more than you can afford to pay back, because before you know it you'll have a rising balance that only gets higher as a result of the interest charges.

Fee waivers

Another benefit of a student card is that the lender usually waives fees you would otherwise need to pay. This includes annual fees, as well as some transaction fees normally charged. Just remember that not all lenders waive the annual fee, so you need to do your research to find one that offers this if you're worried about annual fees.

Incentives and rewards

Lenders want you to use their credit card products because that's how they make their money. So they offer incentives to win your business. Some of these incentives include no annual fee, cash back programs, rewards points and air miles systems, and discounts at certain stores. It's possible to derive quite substantial financial benefits from these incentives without it costing you a cent, provided you always make full repayments on time.

Choose a manageable credit limit

Another way to avoid overspending is to set a lower credit limit for yourself. Credit card companies will give you a spending limit based on your credit score and payment history, as well as on your income level. While these three factors don't carry as much weight for student cards, they are still a consideration when you sign up.

If you have a limit that's higher than you're comfortable with, you can request to have it lowered. This means even if you wanted to spend more in a single month, you wouldn't be able to. This is a good idea if you've had spending control issues in the past and want to ensure you don't get into trouble.

Pick the right card

There are a lot of different options when it comes to credit cards, with each trying to get you to sign up with their attractive welcome bonus, cash back incentives and waived annual fee. However, when it comes to finding the right card for your situation, you need to do your research and take your time.

The most important features to take into consideration are the interest rate and additional fees attached to the card. If you plan on using the card internationally or to transfer funds, you need to make sure it includes these services, and find out what fees are involved. The same rule applies when it comes to where you plan on using the card most often, to ensure you get the most out of the points or cash back incentive. Air miles or car rental discounts, for example, may not be of much use if you don't plan to travel far any time soon, so make sure you choose a card with incentives that fit your current lifestyle and needs.

Set up automated payments

In addition to overspending, one of the biggest reasons people get into trouble with credit cards is because they start missing payments. Once you miss a due date, you start getting charged extra fees. This includes interest charges as well as a late payment charge. These costs are added to your total balance, resulting in a higher bill next month.

To avoid this, we recommend setting up an automated payment plan from your bank account. Having this set up means you don't need to worry about missing a payment or being late with your bill when it's due.

Can I get a student credit card if I am younger than 18?

You have to be at least 18 years old to be able to be approved for a credit card, and 19 in some provinces and territories. The only way around this is to be added to an existing account as an authorized user, possibly on one of your parent's credit cards.

Do I have to be a student in order to get a student credit card?

You need to provide proof of being a post-secondary student who has reached the age of majority — 18 or 19, depending on where you live — to be able to get a student card in the US. Most lenders require this proof before approving the application. However, there are other cards available with no annual fee and low income requirements, not specifically classed as student cards but with similar features.

Do I need a credit score to get a student credit card?

Lenders know that students don't typically have a credit score established and take that into consideration when it comes to this type of card. This means they look more at your educational enrollment along with any independent income when evaluating your application.

What is a co-signer?

A co-signer is someone who has a good credit score and applies for a credit card jointly with you. They become legally responsible for repaying the account balance if you fail to do so, so it's not something to be undertaken lightly. An alternative to getting a co-signer is to be added as an authorized user on an existing account, such as a parent's credit card account.

What proof of income will I need to provide?

If you're a student you don't need to provide the same proof of income you would otherwise need to give for a traditional card. In most cases, proof of a family allowance or scholarship is enough to get approved, but if you have income from part-time employment you can provide pay stubs as well.