In the early stages of your business career, your credit score is one of your most valuable financial assets. It might be beneficial in the future when you need to purchase a vehicle, get a loan, or finally obtain a mortgage for your first house. However, there is a grab that you normally need to have a credit history to be accepted for a credit card, but you must first get a credit card to build your credit history. No matter how far off in the future those goals may seem, it is never too early to begin developing your credit history.
Acquiring a student credit card is one of the most convenient and effective methods to do this. A student credit card is an excellent tool for establishing a credit history and developing sound financial habits. The prospect of building solid credit may seem daunting at first, but doing so early on may position you for success when it comes time to buy a vehicle, apply for credit or rent an apartment in the future. Student credit cards are a terrific way to get started on your credit path, whether you’re a college student, an overseas student, or a non-traditional student.
Join the Accepted Platinum Credit Card Rewards Program!
Table of Contents
Advantages of Having a Good Credit Score
There are many scenarios in which having good credit is useful, some of which are listed below:
Borrowing money in an urgent situation or any other time easily. The difference between being approved and being rejected for a credit card or a vehicle loan or a personal loan or a mortgage or any other kind of loan might be as little as one point on your credit report. Furthermore, having excellent credit might qualify you for cheaper loan rates, which can result in significant savings.
Getting a job. Depending on your career, you may be required to have excellent credit to employment screening. Some businesses do credit checks on employees, particularly for occupations that require them to handle other people’s money.
Starting a company, some creditors may look at your credit score when determining whether or not to provide business loans to you. If you have ambitions to establish a company or want to leave the door open to the prospect of doing so, having a strong credit score may help you keep interest rates down.
Renting an apartment. Whether you seek to rent an apartment, your landlord can check your credit score to see if you can pay your rent on time.
Placing utilities. Customers’ credit histories are routinely checked by utility providers. If you have bad credit on your side or no credit history, your utility may need a deposit or a statement of guarantee from someone who will pay your bill if you cannot. If you do not have a letter of guarantee, your power company or water utility may refuse to provide it.
How to Select the Best Student Card
Student cards are designed to help students establish credit and eventually qualify for better cards. Saving money and reporting to all three credit agencies are the main benefits of a good student credit card. A decent credit card should include the following features.
- Annual Fees: When on a student budget, avoiding yearly fees is great. A no-annual-fee card keeps prices low and makes it simpler to keep an account open if you’ve built up enough credit for better cards. Keep your initial credit card active to extend your credit history and improve your credit score.
- Basic and persistent rates: Using a credit card for the first time has higher interest rates, so pay your payment in full each month to prevent incurring interest. Some student cards offer a 0% introductory period, which might be useful if you have a large purchase to pay off over time.
- Insights into credit: Your student credit card should report to TransUnion, Experian, and Equifax. These firms collect data needed to construct credit ratings. That’s why you want them to note you’re positive payment history.
- Rewards: If you want to earn points or cash back for your purchases, search for a card that gives at least 1% rewards. Some student credit cards are more generous, but 1% is a good start. Choose a card whose benefits match your spending to receive the most value. Others give a welcome extra. These perks may help you pay for college, but only if you don’t overpay to get them. To avoid overspending, get a student credit card with benefits that you can afford.
- Foreign transaction fees: They are a 1% to 3% premium on purchases made outside the nation. If you spend a semester studying abroad, it might be a big financial impact. Look for a student credit card with no international transaction fees.
- Acceptance on a global scale: Another factor to consider while studying abroad is the ease with which you may make use of your credit card. Visa and Mastercard are commonly accepted around the globe.
Best Credit Cards for Students
Discover it® Student Cash Back Card
This card provides high earning rates and a welcome bonus seldom seen in student cards. The perfect cardholder leverage could generate substantial cashback. Each quarter, students may receive 5% cashback at Amazon.com, grocery shops, restaurants, petrol stations, and while paying with PayPal, up to the quarterly limit. Plus, get unlimited 1% cashback on all purchases.
Unlimited cashback matches after the first year, Discover will automatically match all cash back earned. There is no minimum expenditure, no maximum reward, and no annual charge.
Pros:
- Get notified if your SSN(social security number) is found on one of the hundreds of bad Web sites. The feature is free for activation.
- Discover is accepted at almost every business that accepts credit cards.
- 5% cashback on rotating reward categories
- Cashback match for first-year students
- This card could be used for direct payments, charity donations, and gift cards
Cons:
- The five per cent bonus cashback rate is restricted to a total of $1,500 in spending every quarter.
- Bonus categories must be engaged at least once a quarter.
- The base reward rate is as low as one per cent.
- You need to keep track of the bonus categories and enrollment dates.
- The introductory APR period for purchases is just 6 months, which is too short.
Bank of America® Travel Rewards Credit Card
This card offers students easy-to-earn rewards and comes with a generous welcome bonus, but it is also suggested for students who plan to study abroad as there are no charge foreign transaction fees while in the United States. With no expiry date on your points, you may earn 1.5 points for dollars spent on any transaction, anywhere, at any time.
After spending around $1,000 in purchases during the first 90 days of account setup, you will get 25,000 bonus points as part of the introductory promotion. Also, there are no annual fees.
Pros:
- Rewards redemption choices that are flexible
- On all purchases, you will get 1.5 points for every $1 spent.
- There are no international transaction fees.
- Welcome bonus that is simple to earn
Cons:
- High balance transfer cost.
- There are no additional categories to increase awards.
- On balance transfers, there is no introductory APR offer.
- A high penalty APR as well as a late charge.
Discover it® Student Chrome
This card provides a steady category bonus for restaurants and petrol, making this card ideal for people who can’t ‘cook and those who travel to school. Even better, it provides a welcome incentive in the form of matching the cashback earnings after your first year as a cardholder.
Each quarter, you may earn 2% cashback at gas stations and restaurants on up to $1,000 in total purchases. Plus, receive an unlimited 1% cashback on all other purchases. Cashback is unlimited. As a welcome incentive, Discover will automatically double all cash back earned after the first year. There are no minimum or maximum spends or incentives. There is no yearly charge.
Pros:
- No annual fees.
- Earn incentives while gaining credit at the same time.
- APR offer for the first session
- The first year’s cashback is automatically matched.
Cons:
- The highest category reward is restricted at $1,000 every quarter.
- Rewards are below average compared to comparable student cards.
- The 2% cashback at petrol stations and eateries is capped quarterly.
- The card is not as commonly recognised as Visa or Mastercard.
Capital One SavorOne Student Cash Rewards Credit Card
This card has outstanding advantages and cashback. With terrific cashback in high-spend categories, the incentives are substantial for eating, entertainment, and grocery shopping, but the hazards of fast collecting debt if not paid off on time every time are also extremely significant. Earn 3% cashback on all restaurants, entertainment, popular streaming services, and grocery store purchases, and 1% on all other transactions. In addition, Vivid Seats is offering 8% cashback on tickets through January 2023. There is no yearly cost.
Pros:
- No annual fees.
- There are no international transaction costs.
- Profitable cash-back opportunities
Cons:
- APR which is too high
- There is no introductory APR
- A limited number of bonus cash back reward categories.
Join the Accepted Platinum Credit Card Rewards Program!
Chase Freedom Series of Credit Cards
These are considered to be among the finest available. Its perks, which include purchase protection, travel insurance, and extended warranty protection, are well worth considering. In addition, the card has a lower annual percentage rate (APR) than many other student cards. The Chase Freedom Student credit card is an excellent option for students who are just starting on their credit adventure since it offers an easily accessible welcome bonus, no annual fee, and the opportunity to earn no-hassle, flat-rate cashback. Additionally, you may earn $20 in Good Standing Rewards on your account anniversary for up to five years. There is no yearly cost.
Pros:
- Get 1% cashback on all purchases.
- Free credit report.
- Accounts in great shape will get a $20 account anniversary prize every year for the next five years.
- Receive a $50 welcome incentive after your first purchase during the first three months.
- For qualifying cardholders, the credit limit increases after five on-time payments.
Cons:
- No bonus spend categories.
- No introductory APR on purchases as well as balance transfers.
- The 1% general purchase reward is lower than some other cards in this category.
Bank of America® Unlimited Cash Rewards
This offers a student’s program which is an appealing option for students. While it offers a competitive rewards rate for a student card, as well as an attractive low introductory APR on purchases and debt transfers, its weakest link is in the absence of important features that are often associated with rewards cards. Earn limitless cash back at a rate of 1.5 per cent on all transactions. Following the completion of at least $1,000 in transactions during the first 90 days of starting the account, new cardholders will be eligible to receive a $200 cash rewards incentive. There is no yearly cost.
Pros:
- Purchases & balance transfers are subject to an introductory APR.
- Earnings from prizes are excellent.
- Bonus on your first purchase.
Cons:
- There are no significant advantages.
- Balance transfer fees are high.
- Foreign transaction fees are quite high.
Student Credit Card vs Others
Students with no or little credit history could apply for college student credit cards. Responsible usage of a student card may help improve credit and earn incentives. Unsecured student cards do not need a deposit to open. Some other aspects distinguishing student cards from regular cards are that the student cards may well have lesser credit limits than regular cards since students have less credit history. Depending on the card, you could be able to raise your credit limit after a few timely payments. Some student credit cards provide cashback. In addition to sign-up incentives and airline miles, conventional cards give access to airport lounges.
Conclusion
Credit cards for students serve as an early stage for the student to learn to be self-sufficient and to manage their credit in preparation for their future careers and lives. There are a variety of credit cards available, each with its own set of advantages. There are six best credit cards for students included in this article, along with their respective benefits and downsides so that the student may make an informed selection based on his/her specific needs and circumstances Also, one should be aware of the factors to consider while applying for a credit card.
