Making Smart Financial Choices and Building Credit in College
Making smart fiscal choices and building credit while in college can help set you up for financial success as you move into the real world. One of the key steps in building credit is getting and responsibly using a credit card.
College students know that the friends that they make and the skills that they learn often last for the rest of their life. But they may be less aware of the fact that many of the money decisions that they make during this time can also have a lasting impact.
Making smart fiscal choices and building credit while in college can help set you up for financial success as you move into the real world. One of the key steps in building credit is getting and responsibly using a credit card.
But it can be hard to know which credit card is best for you. Here’s a look at eight credit cards that we think students should consider.
Best credit cards for students
Best for earning cash back on everyday purchases
What we like about this card:
- The highest cash-back categories for the Capital One SavorOne Student Cash Rewards card are ones where students tend to spend a lot, including dining, entertainment, and streaming services.
Pros:
- No annual fee
- Earn 10% cash back on Uber and Uber Eats
- 3% cash back on dining, entertainment, streaming services, and some grocery stores
- 8% cash back on entertainment booked through Capital One
- 5% cash back on hotels and car rentals booked through Capital One
- 1% cash back on all other purchases
- Flexibility to receive cash back in a statement credit or check on demand, or set up automatic cash back at a specific date or threshold
Cons:
- Those with expenses outside of bonus categories may find cards with better cash back rates
Best for straightforward cash back
What we like about this card:
- The Capital One Quicksilver Student Cash Rewards Credit Card pays a flat 1.5% cash back on all purchases (plus 10% on Uber purchases), making it the simplest reward structure of all the cards on this list.
Pros:
- No annual fee
- Unlimited 1.5% cash back on all purchases
- 10% bonus cash back on Uber and Uber Eats
- Flexibility to receive cash back in a statement credit or check on demand, or set up automatic cash back at a specific date or threshold
Cons:
- Cardholders who spend a lot in specific categories might do better with cards that reward them at a higher rate
Best for students who don’t have a cosigner
What we like about this card:
- Students under age 21 will need a co-signer to get a traditional credit card. If that’s not an option, a secured card is a great first step to start building credit.
Pros:
- No annual fee
- No need for a cosigner or credit check
- Potential to upgrade to an unsecured card after establishing a track record of paying on time
Cons:
- Requires a refundable security deposit of $49, $99, or $200
- Relatively low maximum credit line of $1,000
Best for earning rewards without a credit history
What we like about this card:
- This is another secured credit card that doesn’t require a cosigner or a stellar credit score for approval. It also allows you to earn up to 2% cash back on gas and restaurant purchases (up to $1,000) and 1% on everything else.
Pros:
- No annual fee
- No cosigner or credit check required
- Can request a credit limit increase after six months of on-time payments
- Offers modest rewards on popular categories
Cons:
- Initial credit limit is only $200
- Requires a $200 refundable deposit
- APR is high, at 30.49%
Discover it Student Chrome
Best for commuters and those who frequently eat out
What we like about this card:
- Discover automatically matches any cash back earnings at the end of your first year, meaning you can earn the equivalent of 4% cash back on spending at gas stations and restaurants.
Pros:
- No annual fee
- Earn 2% cash back at gas stations and restaurants up to a combined $1,000 in purchases
- 1% cash back on everything else
- Unlimited cash back match after your first year of spending
Cons:
- Cap on 2% cash back categories limits earning potential
- High spenders or those who spend outside of gas stations and restaurants may earn better rewards with a different card
Discover it Student Cash Back
Best for students who like tracking reward bonus categories for additional cash back
What we like about this card:
- Discover automatically matches any cash back earnings at the end of your first year, meaning you can earn the equivalent of 10% cash back on spending if you activate rotating bonus categories.
Pros:
- No annual fee
- Earn 5% cash back on rotating cash back categories, up to $1,500 per quarter
- 1% cash back on all other spending
- Unlimited cash back match after your first year of spending
Cons:
- Cap on 5% cash back in quarterly categories limits earning potential
- Taking advantage of bonus categories requires tracking and opting in
Best for soon-to-graduate students
What we like about this card:
- The American Express Blue Cash Everyday Card offers bonus categories – groceries, online shopping, and gas – that align well with the type of purchases students and soon-to-be graduates make when they move out of the dorm and into their first apartment.
Pros:
- No annual fee
- Earn 3% cash back on groceries, online retail purchases, and gas up to $6,000 per year per category
- 1% cash back on all other purchases
- Statement credits for the Disney streaming bundle and Home Chef
Cons:
- Rewards in bonus categories are capped, limiting earning potential for big spenders
- Foreign transaction fee of 2.7%, making it a poor choice for students planning to study abroad
- Requires at least good credit for approval
Petal 2 “Cash Back, No Fees” Visa Credit Card
Best for students who don’t like fees
What we like about this card:
- Like all other cards on this list, Petal 2 does not have any annual fees, but it also has no late fees or returned payment fees.
Pros:
- No fees
- Earn 1% cash back on all purchases
- After six months of on-time payments, earn 1.5% cash back
Cons:
- The 1% starter cash back rate is lower than on some other cards
- Petal has limited card options, so you’ll have to choose a different issuer when you’re ready to graduate to a card that offers richer rewards
What is a student credit card?
A student credit card is a credit card designed for college students just starting their credit journey. They typically have lower credit limits and less valuable rewards than other cards, since they’re meant for students with less experience managing their credit. That said, the barriers to entry are lower: In some cases, you can be approved with either poor or no credit, which makes them accessible to almost anyone.
How to choose a student credit card
The best credit card for you will depend on several factors, including whether you have a cosigner (required for anyone under age 21 without proof of sufficient independent income), the categories in which you spend the most, and whether you want to spend time opting into rotating categories.
How to get a student credit card
If you’re under age 21, you’ll typically need a cosigner to get approved for a credit card. If that’s not an option, you can apply for a secured credit card, which will require a refundable deposit (typically between $50 and $200). Whichever route you choose, you’ll need to apply for the card by providing basic information, such as your Social Security number and employment information, if applicable.
Should college students have credit cards?
College students who are able to pay off their credit card every month can get a great start building their credit for the future. However, college students who expect to carry a balance might be better off waiting to get on better financial footing.
Can you pay student loans with credit cards?
You can’t pay federal student loans with credit cards…