Overview of Student Credit Cards
A student Credit Card is a type of Credit Card that has brought conceptually for students to help them financially in their study expenses.
This Credit Card also helps them to build Credit Score in their early stage. But first lets study what Credit Card is?
Credit Card is a piece of plastic Card issued by financial organization that lets you spend money from it just like other normal cards but the difference is that it follows “spend now, pay later” model.
To know more about credit cards and their business model you can go this page What is Credit Card? Business Model of Credit Card.
All Credit Cards whether regular one or for student, functions in same way and have almost same features. But there are some norms and flexibility that makes credit cards for students different in some way.
But let first know some features and norms of non-student Credit Cards :-
- This type of card requires Individuals good credit score to be issued and that also decides credit limit.
- Can require exhaustive documentation for issuing the card.
- These cards are generally for big transaction and hence have comparatively bigger credit limit.
- You have to repay the fee for reissuing the card in case you have missed it.
- Generally have high rewards and cashback offers on purchasing and transactions.
While for student credit cards, you will see these norms and features :-
- Student Credit Card is easy to qualify for and not requires heavy documentation for verification.
- This card is a good way to build initial credit score which can be used further for regular credit cards. It also develops a healthy spending habit in students.
- Student Credit Cards have generally low annual fee.
- These type of cards have low credit limit as students are not expected to spend lots in a month.
- This card can be upgraded to regular credit card at any time.
Eligibility Criteria For Student Credit Card
The above points doesn’t mean that any one can easily qualify for student credit card. Different card issuer might have different eligibility criteria. Some common eligibility criteria are :
- The card holder must be at-least 18 years old
- He/she need to be a student of a college or university
- Some card issuer may ask the student or his/her parents to to open a fixed deposit account with a pre-determined amount
- Some card issuer also see students permanent regular income to issue the card and this also determines the credit limit of the card
- There are some banks who issue student credit card only to those who have taken education loan from the same bank
Benefits of Student Credit Card
Buy Now Pay Later :- Generally students don’t receive big pocket money. Some time they need emergency money to buy things like books, laptops and related stuffs, have to pay fee etc.
Here credit card gives them facility to spend the credit from their cards for their purchases and pay later at the end of the month when they have money.
Rewards and Cashback :- Just like regular credit cards, student credit cards also give good rewards and cashback. This way students can save lots of money for their other purchases.
Majority of the people take credit cards just for this rewards and cashbacks.
Affordable :- As student credit cards doesn’t require joining fee and don’t charge you annual fee, it is affordable for students. Having a student credit card has almost no loss untill you pay your credit card bills at time.
Credit Builder :- As regular credit cards require your credit score and history to be issued and credit limit hugely depends on these, means larger your credit score, more limit you will get, student credit cards is a good mean to start and build your credit score initially.
These credit scores and history then can be used for regular cards.
Upgradable :- Student credit cards can be upgraded to regular credit card at any moment. This way there is a smooth transition without lots of documentations.
What should you look before taking credit cards?
Taking the credit card is not like buying a burger. You have to consider a plethora of options to make your decision.
Almost all credit card provider company provides same like services but their effective cost and quality differs. Here we are giving you some points which might be considered to select your credit card.
Credit Card Company
Although you can take credit card from any company but it is better to take credit card from your own bank rather from third party company. This will save your certain hidden charges.
This is the limit of credit set by your card provider upto which you can spend. Generally if you don’t do lots of purchases in a month then nothing is a problem.
But this is not the case for every credit card holders.
Its better to go with who are giving you more credit limit to spend. As i have mentioned in the What is Credit Card page that the credit limit depends on individuals credit score and history. Better your score more you would get.
If you don’t pay your credit card bills on time, you got extra charged as fine which is generally very high as depends on company to company.
Its better to go with those who charge affordable late fine as it is more common for credit card holders not to pay their bills at time.
This non-time payment of bills is the biggest Income source of the credit card companies.
Credit Cards company provides rewards on every transaction in the form of real cash back or some points which can be later used for purchase. Some people just buy credit card for these rewards.
High level cards gives you higher reward and extra features like Insurance has generally higher fee. So if you do lots of transactions then you can go with the higher one. Otherwise you can go with medium level cards.
You must consider the payments methods given in your card. Some payment networks like VISA and MasterCard is widely acceptable all around the world.
But some like AmericanExpress, Diners Club are not equally accepted world wide.
Best Credit Cards for Students
Chase Freedom® Student credit card
This is one of the widely used credit card for students in the united states for gaining credit score. It welcomes you with $50 bonus when you make your first purchase within first 3 months and also award you with additional $20 for next 5 years for keeping your card in good conditions.
There is no joining fee or annual fee for the card and it gives you 1% cashback for every purchases and transactions. If you make five on-time payments, then you can also increase your monthly credit limit.
- $50 welcome bonus
- No annual fee
- 1% cashback on every transaction
- Gives you free credit score
- $20/year for five years for keeping your card healthy
- Credit limit can be increased
- 14.99% variable regular APR
Bad Part :-
- Cashback is low of 1% only
- No 0% APR promotion for purchases
Discover it® Student Cash Back
Discover it Student Cash Back card is overall the best credit card for students. Forbes this year has ranked it first among all other student cards.
If you are using credit card for the very first time, you can go with this to build your credit, to learn how to efficiently manage your credit funds and build healthy repaying habits.
As a welcome bonus, you will get first year cashback match. There is no penalty APR charged on you late repaying your credit bills and no annual fee is charged for the card. As a reward it gives 5% cashback on everyday purchases at places like amazon.com, gas stations, restaurants, grocery and gives 1% cashback on all other purchases.
- First time use preferred
- No annual fee
- First year Cashback match as welcome
- No penalty APR
- 5% cashback on gas station, restaurant grocery and amazon
- 1% cash back on other purchases
- 12.99% – 21.99% variable regular APR
Bad Part :-
- Complicated rewards
- 5% cashback is limited to within certain criteria
Bank of America® Travel Rewards credit card for Students
This is best student credit card for those who study abroad from united states as it has no foreign transaction fee.
When you join, this card will welcome you with 25,000 bonus points and doesn’t charge any annual fee. This card gives you free credit score to help students build good credit.
With non-expirable 1.5 points per $1 on all spending, it also gives flexible travel redemption options.
You will be offered offers a 0% introductory APR for 15 billing cycles on purchases and after then the regular annual percentage rate is about 13.99% – 23.99% which is variable.
This card is not good for bank transfer as it charges high on transfer.
- Specialized for student studying abroad
- $0 annual fee
- 25,000 welcome points
- 1.5 points per $1 spending
- 0% introductory APR for 15 billing cycles
- 13.99% – 23.99% regular APR
Bad Part :-
- High balance transfer fee
- High penalty APR and late fee
Discover it® Student chrome
This card is great for those students who want to start his/her credit card journey. It provides good mean to learn and build your credit history and score.
Easy to use and cashback and reward system is simple, just a dollar-for-dollar match. As a welcome bonus, Discover automatically match all the cash back at the end of the year.
With no annual charges, this card gives you 2% cashback on at Gas Stations and Restaurants on up to $1,000 in combined purchases and 1% on other purchases.
- $0 annual fee
- $0 foreign transaction fee
- 2% cashback at gas stations and restaurants while 1% for others
- Earn $20 statement credit each school year if your GPA is 3.0 or higher
- 0% intro APR on purchases for 6 months, then 12.99% – 21.99% variable
- Reward earning is capped
- Low rewards of just 1%
Deserve® EDU Mastercard for Students
This card fits best for those international students or those who don’t have any credit history.
Definitely if you are going to use credit card for the very first time, you would surely have without any credit history, then this card is for you to start.
This card gives a flat 1% cash back reward on every purchases, have no foreign transaction fee and annual fee. Along with that it also gives other benefits like cell phone protection.
The qualification process is easy to qualify as it doesn’t require a social security number to apply.
However I would not recommend this card if you already have a good solid credit history as there are other student credit cards that gives these features with good rewards.
- $0 annual fee
- No foreign transaction fee
- 1% cashback on every transactions
- Easy to qualify
- Secure cell phone with protection upto $600
- 18.74% Variable regular APR
- $30 earning on referring card to others
- High variable APR
- Low rewards