Should I Get a Student Credit Card?

Should I Get a Student Credit Card? article image.

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When it's time to apply for your first car or home loan, coming to the table with good credit could help you qualify for a competitive interest rate and good terms. That's why it can pay off to start building credit at a young age, even before you plan on making a major purchase.

A student credit card can be a great tool to start building credit while in college. Here, we discuss the benefits of student credit cards and some pitfalls that you should know about before applying for one.

Benefits of a Student Credit Card

Opening a student credit card could be a smart move if you use it sparingly and pay the balance off each month. Here are some things that a student credit card can help you do:

  • Build credit. If you don't have any other credit accounts, a student card can help you get started on your credit journey, which can pay off later when it's time to take out a loan, rent an apartment or even get a job. Paying your credit card bill on time can help you establish a positive payment history as you work toward a strong credit score.
  • Pay simply and safely. Credit cards can make online shopping easier and safer. Student cards may come with zero liability protection, which means you won't be held responsible for unauthorized charges if your card number gets into the wrong hands. You may even be able to connect your card to a mobile wallet to make contactless in-store purchases.
  • Earn shopping rewards. Some student cards offer cash back on purchases or when you shop in certain stores.
  • Get student perks. You may be able to qualify for incentives, such as a credit if you maintain a certain GPA or bonus cash back if you pay on time.

Drawbacks of a Student Credit Card

While there are many benefits of student credit cards, there are some drawbacks to think about before applying. Here are some disadvantages of student credit cards:

  • Low credit limits: Student cards may have lower credit limits than you might find with a non-student credit card. However, the credit card company may increase your limit after you establish a track record of on-time payments.
  • High annual percentage rates (APRs): Student cards are geared toward students with limited credit. Because of this, they may have higher interest rates than other cards.
  • Potential debt trap: If debt piles up on your card, a student credit card could end up doing more harm than good, especially if you have a limited income. Not being able to make the minimum monthly payments could hurt your score, and late payments can stick around on your credit report for up to seven years.

Do You Have to Be a Student to Get a Student Credit Card?

Whether or not you have to be a student to get a student credit card depends on the card issuer. In some cases, you have to tell the credit card company what school you attend in the application. There are exceptions, though: Being a student isn't required to apply for the Journey Student Rewards from Capital One.

Besides the school requirement, you may need to be a U.S citizen or legal resident with a social security number to apply. The minimum age for a student credit card is typically 18 years old. However, if you're under 21, you may need to sign up with a cosigner or show proof of independent income.

The credit history needed to qualify for a student credit card can vary as well. In some cases, you may need some credit history to get approved, and payments on student loans could help you in this area.

If you have no credit history, you may still have options. For example, Petal is a company that looks beyond credit history alone to approve borrowers for the Petal® 1 "No Annual Fee" Visa® Credit Card.

Choose One of the Best Student Credit Cards

If you're interested in applying for a student credit card, the Journey Student Rewards from Capital One and Petal® 1 "No Annual Fee" Visa® Credit Card are two excellent choices—and neither one has an annual fee.

The Journey Student Rewards from Capital One, for example, offers 1% cash back on all purchases, but that bumps up to 1.25% cash back if you pay your bill on time for that month. New cardholders can also earn a $5 statement credit per month (with a 12-month limit) for select streaming services when you pay your credit card bill on time; restrictions apply.

If you're not sure which student credit card would be the best for your situation, you could use Experian CreditMatch™ to get personalized student credit card offers.

Next Steps

Before applying for a student credit card to build credit, a good first step is checking to see what's currently on your credit report. You can get your Experian credit report and FICO® Score for free when you sign up for Experian CreditWorks℠.

Got approved for your first student card? Congratulations! Now it's time to use your card to build credit. Maintaining a low balance and diligently paying the bill on time each month can help you grow your credit score in college and beyond—and that can help you reach your future financial goals.

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