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Best of, College Students and Recent Grads, Credit Cards

Best Student Credit Cards December 2017

The editorial content on this page is not provided by any financial institution and has not been reviewed, approved or otherwise endorsed by any of these entities.

Getting a credit card while you’re in college might seem dangerous or confusing. But if you are able to use a student credit card responsibly, you do not need to be afraid, and you can set yourself up for financial success after you leave school.

Fortunately, learning how to choose and use the right student credit card is relatively simple. Make sure you avoid annual fees and go with a bank or credit union you can trust. When you get the card, make sure you use it responsibly and pay the balance in full and on time every month. If you do these things consistently over time, you can leave school with an excellent credit score. And if you want to rent an apartment or buy a car, having a good credit score is very important.

Our Top Pick

Discover it® for Students

Annual fee
$0
Cashback Rate
up to 5%
APR
13.99%-22.99%

Variable

Credit required
fair-credit
Fair

Best for Commuter Students

Bank of America® Cash Rewards credit card for Students

APPLY NOW Secured

on Bank Of America’s secure website

Bank of America® Cash Rewards credit card for Students

Annual fee
$0 For First Year
$0 Ongoing
Cashback Rate
1% cash back on every purchase, 2% at grocery stores and wholesale clubs, and 3% on gas for the first $2,500 in combined grocery/wholesale club/gas purchases each quarter
APR
13.99%-23.99%

Variable

Credit required
fair-credit

Average OK

Best Flat-Rate Card

Journey® Student Rewards from Capital One®

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on Capital One’s secure website

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Journey® Student Rewards from Capital One®

Annual fee
$0
Cashback Rate
up to 1.25%
APR
24.99%

Variable

Credit required
fair-credit

Average Credit

Best Intro Bonus

Wells Fargo Cash Back College℠ Card

APPLY NOW Secured

on Wells Fargo’s secure website

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Wells Fargo Cash Back College℠ Card

Annual fee
$0 For First Year
$0 Ongoing
Cashback Rate
up to 3%
APR
11.90%-21.90%

Variable

Credit required
fair-credit
Fair Credit

Best Credit Union Card

Altra Federal Credit Union Student Visa

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on Altra’s secure website

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Altra Federal Credit Union Student Visa

Annual fee
$0 For First Year
$0 Ongoing
Rewards
1 point per dollar spent
APR
14.90%

Fixed

Credit required
zero-credit
New to Credit

Best for Studying Abroad

Bank of America® Travel Rewards credit card for Students

APPLY NOW Secured

on Bank Of America’s secure website

Bank of America® Travel Rewards credit card for Students

Annual fee
$0 For First Year
$0 Ongoing
Rewards
1.5 points per dollar spent
APR
15.99%-23.99%

Variable

Credit required
fair-credit
Fair Credit, Limited Credit history

Best Secured Card

Discover it® Secured Card - No Annual Fee

Annual fee
$0
Minimum Deposit
$200
APR
23.99% APR

Variable

Credit required
bad-credit
Bad

Best for No Credit History

Deserve Edu Mastercard

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on Deserve’s secure website

Deserve Edu Mastercard

Annual fee
$0 For First Year
$0 Ongoing
Cashback Rate
1% on all purchases
APR
19.74%

Variable

Credit required
zero-credit
New to Credit

Also ConsiderAlso Consider

Golden 1 Platinum Rewards for Students

Golden 1 Credit Union Platinum Rewards for Students:

This credit card offers a snazzy rewards program: rather than accumulate points, you’ll get a cash rebate instead. All you have to do is make a purchase. At the end of the month, you’ll get a rebate of 3% of gas, grocery, and restaurant purchases, and 1% of all other purchases deposited back into your Golden 1 savings account at the end of the month. You can join Golden 1 by joining the Financial Fitness Association for $8 per year and keeping at least $5 in a savings account.

What should I look for in a student credit card?

The most important thing to consider when looking for a student credit card is that it charges no annual fee. You should never have to pay to build your credit score. Fortunately, most student cards don’t charge you an annual fee, but it’s still something to watch out for.

The second most important thing you should keep an eye out for are tools that help you learn about credit or even promote good credit-building habits. For example, some student credit cards will give you a free monthly FICO score update. You can use this freebie to see in real time how your credit score changes as you build credit history by keeping the card open, or paying down your credit card balance, for example.

The last thing you should be considering when picking out a student credit card is the rewards program. I know, I know, it seems counterintuitive. But stick with me — I’ll show you why in the next question.

Why shouldn’t I be concerned about maximizing my rewards while in college?

Rewards cards are nice to have. But if you’re a college student, here’s the truth: you probably won’t spend enough to earn meaningful rewards.

Why? With a good rewards program, you can earn points or cash back. A small percentage of your monthly spending can add up quickly. However, given the tight budget that most college students live on, it will probably take a while to earn meaningful rewards. For example, if you earn 1.25% cash back and spend $300 a month on your card, you would earn $45 of cash back during the year.

College students are very good at making good use of $45. And our favorite card offers a great cash back rewards program. Just don’t expect to earn a lot of cash back, given the tight budget of a college student.

Why should I get a credit card as a college student?

There are a lot of great reasons why you should get a credit card, as long as you can commit to using it responsibly.

The single biggest reason why you should get a credit card as a college student is because you can start establishing a credit history now. When you graduate from college, you will need a good credit score to get an apartment. And your future employer will likely check your credit report. Building a good credit history while still in college will help prepare you for life after graduation.

Getting a credit card while in college can also train you to develop good credit habits now. But you need to be honest with yourself. If you find that you can’t avoid the temptation of maxing out your credit card, you might want to switch to a debit card or cash.

Finally, getting a credit card now can be the motivation you need to start learning about credit. These skills aren’t hard to learn, and they could save you thousands or even hundreds of thousands of dollars later in life (when you want a mortgage, for example).

What is the CARD Act and why should I care about it?

Many years ago, credit card companies would market on college campuses. You could get a free beer mug or t-shirt in exchange for a credit card application. And you would be able to qualify for a credit card without having any income. The Credit Card Accountability Responsibility and Disclosure (CARD) Act was signed into law in May 2009 to change a number of practices.

How did the CARD Act change student credit cards?

The CARD Act made a lot of changes in how credit card issuers do business with students. One of the biggest changes was requiring students to be able to demonstrate an ability to pay. If you are under 21 and do not have sufficient income (a campus job, for example), you would need to get a co-signer.

In addition, colleges must now limit the amount of credit card marketing on campus. The days of free t-shirts and pizzas in exchange for credit card applications are gone. But that doesn’t mean it is impossible for a college student to get a credit card. Some highly reputable banks and credit unions still offer student cards. And building a good credit score while still in college is still highly recommended.

How can I protect myself from racking up debt?

When used properly, credit cards are a very convenient method of repayment. However, when not used properly, you can end up deep in credit card debt. It is important to establish a healthy relationship to credit now, with your first credit card.

You should try to ensure that you pay off your credit card bill in full and on time every month. Ideally, you should set up an automatic monthly payment. And to keep yourself on track, take advantage of alerts offered by most credit card companies. You can even get daily text messages reminding you of your balance.

How can I automate my credit card usage?

If all of this sounds confusing, don’t worry. There’s actually a way you can automate your payments so you never even have to bother with the hassle of using a credit card. All it takes is a few minutes of upfront work.

First, you’ll need at least one recurring monthly bill of the same amount, such as Netflix or Spotify. Log in to your account and set up an automatic payment each month using your credit card. Make a note of how much your monthly bill costs.

Next, log in to your bank account. Set up a second automatic payment to go to your credit card each month for the same amount as the bill. If your bank doesn’t offer the option to set up automatic payments, you may also be able to set up your credit card to automatically withdraw the amount of the bill from your bank.

Because you know this bill will be for the same amount each month (barring any price increases), you can literally just leave this running in the background each month on autopilot. You don’t even have to carry your credit card in your wallet if you don’t want to. Then, when you graduate, you’ll automatically have an improved credit score!

What happens to my student credit card when I graduate?

Congratulations! You’ve made it to the finish line. But what about your student credit card? You will have a few options once you graduate.

First, you can simply keep it. You will want to keep the credit card open, because it helps you build a long credit history. However, you might want to call your credit card company and ask if you can migrate to a standard (non-student) credit card.

But if you have been using your credit card properly, you will have an excellent credit score when you graduate – and you will be able to get any credit card that you want.

Here is a summary of our favorite cards:

Lindsay VanSomeren
Lindsay VanSomeren |

Lindsay VanSomeren is a writer at MagnifyMoney. You can email Lindsay here

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College Students and Recent Grads

7 Ways for College Students to Build Credit

The editorial content on this page is not provided by any financial institution and has not been reviewed, approved or otherwise endorsed by any of these entities.

Ways for students to build credit in college
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College is a great (read: strategic) time to work on building a credit score from scratch. If you work on building credit while in school, you could graduate with a healthy credit score in the high 600s to mid-700s.

Coupled with a solid starting salary, graduating with a good or excellent credit score puts you in a great position to rent your first house or apartment and, eventually, make larger purchases like a new car or a first home. On top of that, you’ll qualify for the best terms when it comes to borrowing personal loans or opening credit cards.

How to build a positive credit history

Here are a few inexpensive things you can do to bulk up your credit report and build your credit score before graduating from college

#1: Learn how to use a credit card — the right way

You can start working on your credit score by opening a student credit card with a bank or credit union. Having a credit card can be risky — there are plenty of stories of students overspending or seeing their credit limit as “free money” — but opening a student card also gives you an opportunity to learn good credit-building habits. Here’s a simple strategy for building credit with a student credit card:

  1. Charge only a recurring bill like a phone bill or monthly streaming subscription to the card.
  2. Set up automatic payments to pay off the credit card bill on time and in full each month.
  3. Rinse and repeat for four years.

When selecting a credit card, you’d ideally choose a credit card that doesn’t charge an annual fee. You shouldn’t use the card for anything other than the recurring bill — and, if absolutely necessary, the occasional emergency. The recurring bill should ideally be less than 30 percent of a your total available credit. (Using as little as possible of your available credit helps you get a good credit score.)

Eventually, your credit score should reflect a history of consistent, on-time payments and will likely be in the good or excellent range. These are some of the best student credit card offers available now.

Con: High interest rates

While credit cards generally carry high interest rates across the board, student credit cards tend to have some of the highest APRs. The rate is high because students don’t usually have much credit history, so lenders see them as risky borrowers and charge a higher interest rate to compensate for the risk.

Pro: Build credit without debt

Using the strategy described above — making a small purchase and paying it off each month — you can establish a healthy credit history without paying a cent of interest. Assuming you pay the bill on time and you’re using the card to buy something you’d purchase anyway, there’s no cost to this approach of building credit.

Con: Low limits

Limits on student credit cards are generally pretty low, as banks want to minimize risk of lending to an inexperienced borrower. A low limit makes it pretty easy to use more than the suggested 30 percent of one’s total credit limit. For example, 30 percent of a $500 limit is $150 — basically the cost of a textbook.

Pro: Access to an unsecured line of credit

Having a credit card gives you a line of credit to borrow from when you need to. This can be helpful if you can’t immediately cover all of your personal costs like books, food or an emergency. The student credit card is also unsecured, meaning the student won’t have to make an initial deposit to open the line of credit.

Con: Easy to make credit mistakes early on

A credit card comes with a lot of responsibility. Having a credit card can make it really tempting to spend more than you can afford (which results in expensive debt) or use a lot of your credit limit (which can hurt your credit score). Be prepared to exercise a lot of self-control if you get a student credit card, because it can take years to undo the damage caused by irresponsible credit card use.

#2: Become an authorized user

If your parent has good credit history, ask them about becoming an authorized user on their credit card. When you become an authorized user, your parent’s behavior with the credit card will be reported like it was your own.

Pro: A passive way to build credit history

If you use this tactic, you can build credit history while never having to actually apply for credit yourself.

Con: It’s not guaranteed to help

Not all credit card issuers report authorized user accounts to the credit bureaus, according to Experian. On top of that, not all credit scores look at authorized users the same. There are dozens of credit scores, each with their own algorithms, and some may not give an authorized user much weight in determining a score, according to Experian.

Con: Could easily backfire

While authorized users are not liable for debts on the account, missed payments or high credit card balances on the account could hurt you. If that happens, you can either file a dispute to have the negative information removed or contact the card issuer and ask to be removed as an authorized user on the card.

#3: Get a co-signer

You can thank the 2009 Credit CARD Act for making it more difficult to get a credit card before you’re 21. The CARD Act stopped companies from marketing credit cards to students on college campuses and made it so people who are younger than 21 must either have a co-signer, such as a parent or a guardian, or have an independent source of income to qualify for a credit card.

Pro: Allows a student who can’t qualify on their own to open a credit card

Lenders generally consider it risky to hand a line of credit to a college student with little or no credit history. By requiring a co-signer, lenders transfer part of this risk to someone else, giving you an opportunity to build your credit you may not have had on your own.

Con: Puts a co-signer at risk

If you go with a co-signer, you need to be very careful to only charge what you can afford to pay off in full each month. Both you and your co-signer’s credit scores will take a hit from any negative behavior like missed payments or high credit card balances. Asking someone to co-sign a credit application is no small request and can affect your relationship with that person. Be sure to set ground rules for the arrangement before agreeing to it.

#4: Get a secured credit card

If you’re unable to get approved for an unsecured credit card, you can try opening a secured credit card instead. A secured card can help prove your responsibility to lenders without a lender taking on much risk. You’ll have to put down an initial deposit in exchange for access to a line of credit on the card. Typically, the line of credit will equal the amount of the deposit. You can check out our roundup of the top secured credit cards for people looking to improve their credit scores.

Pro: A better shot at approval

Because the required deposit lowers a lender’s risk, you have a better shot at getting approved for a secured credit card over an unsecured student credit card.

Con: A required deposit

You will likely have to come up with $100 or more to put down as a deposit before a credit card issuer will approve you for the account. If you miss a payment, the lender can take your deposit. And because the deposit will likely serve as your credit limit, you won’t have much room for spending if you want to reap the credit-score benefits of using little of your available credit.

#5: Get a credit-builder loan

You can get credit-builder loan through banks and credit unions. When approved for a credit-builder loan, your loan is deposited into a savings account, but you can’t access the money until you’ve paid back the loan.

A credit-builder loan is good for students who want to build credit but don’t want to risk overspending on a credit card or using a credit card irresponsibly. Credit-builder loans are secured loans, so they often have lower interest rates than credit cards, too. The loan also gives you the advantage of making equal, periodic payments so you aren’t caught off guard when a bill arrives.

You can find a credit-builder loan account through a variety of lenders. For example, online-only lender Self Lender specializes in credit-builder loans, but they’re common products at credit unions as well. Research a variety of options and compare borrower requirements, as they vary from lender to lender.

Pro: No deposit necessary

You won’t have to come up with any money upfront to open this secured line of credit. You will, however, need to make periodic, on-time payments to effectively build your credit history.

Con: No access to the line of credit

You won’t have access to the funds from a credit-builder loan right away. This could become an issue if you suddenly need money. If you want to access the money, you must first finish paying off the loan to the lender.

Con: Fees

Some credit-builder loans come with fees, making this a potentially costly option for building credit.

#6: Stay on top of student loan payments

If you have student loans, repaying them will be a crucial part of your credit history. After graduation, you can easily hurt your credit score by missing a student loan payment. Many student loans have a grace period of six months after graduation, meaning you won’t have to make payments during that time. If you’re not paying attention to when that grace period ends, you could easily miss your first payment and hurt your credit score.

A missed payment can cause your credit score to drop significantly and stay on your credit report for years, which can be seriously harmful to someone just starting to build a credit history.

Credit-building tip: You don’t have to wait until your loans come due to start making payments. If you can afford to start paying your student loans while you’re in school, you can save money in the long run, and you don’t have to wait until you graduate to establish a positive payment history on your credit report. This could give you a head start on getting out of debt and building your credit before entering “the real world.”

Keep an eye on your email inbox and physical mail for information from your loan servicer (the company to which you make loan payments) regarding your first student loan bill and be sure to make your payment. Continuing to make on-time payments on student loans will help you build a good credit history.

If you can’t afford the student loan payments and have federal loans, you can learn all about how to enroll in an income-driven repayment plan here. Enrolling in an income-driven plan can reduce or eliminate your required student loan payment, making it easier to stay on top of payments and avoid credit damage.

#7: Build credit with a rent payment

If you rent an off-campus apartment, you can build your credit history by simply paying rent on time, if it’s reported to the major credit bureaus. Students should ask their landlord or property manager if their rent payments are reported to Equifax, Experian or TransUnion.

If the rent-taker doesn’t report the payments, you can ask them to sign up for a rent payment service like PayLease or RentTrack that will let you pay rent online and give the landlord the option to report the payments to the bureaus. The rent payment information will be included on a standard credit report and can help students build good credit history without ever opening a line of credit.

Pro: Build credit with money already intended to spend

You’re already spending money paying rent each month, so why not make that payment serve both your housing and credit-building needs?

Con: Some landlords may not agree to report payments

Many landlords check credit scores when a tenant applies, but not many report regular, on-time payments to the big three credit bureaus. Getting your landlord to switch to (and pay for) a payment service they aren’t familiar with might be a long shot, but it’s worth asking.

Con: Not all credit scores factor in rent payments

This isn’t a sure-fire way to build credit, as not all credit scoring models include rent-payment history. The same goes for utility payments: They could help you build credit, but they may not. If you’re looking for a certain way to work on your credit, the other strategies in this article make more sense.

Brittney Laryea
Brittney Laryea |

Brittney Laryea is a writer at MagnifyMoney. You can email Brittney at brittney@magnifymoney.com

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