Students and credit cards can be a tough fit. On one hand, students and other young adults can be inexperienced at managing credit, which can lead to debt and a damaged credit history. Yet when managed responsibly, a credit card can offer students a secure and convenient method of payment, and an effective way to establish credit history.
So once students decide to get a credit card (perhaps with the guidance of their parents), how can they choose the best one? First, students should look for a card that will be the easiest to use and offer the lowest rates and fees. Good features to look for include text and email alerts, as well as a mobile app that allows you to manage the account from anywhere. And while students and other young adults with a limited credit history tend to pay higher interest rates, they should still look for the most competitive terms offered. Many student credit cards carry an annual fee, but there are also student cards that offer to waive an occasional late fee, while others have no foreign transaction fees.
Other features to look for in a student card can include roadside assistance and travel insurance policies, both of which can be valuable to students living away from home for the first time. In addition, some student cards will offer rewards, but this should not be a primary consideration, as it can be tempting for inexperienced cardholders to make unnecessary purchases just to earn additional rewards. Besides, with most students operating on limited budgets, the amount of rewards that can be earned may be relatively small – even more so if the student carries a balance that incurs finance charges, which can outweigh the rewards being earned. A similar caution applies to student cards with 0% APR promotional financing, as it may encourage some cardholders to incur debt.
Students may want to consider having a checking or savings account with the same bank or credit union where they have a credit card, which would allow them to manage both accounts with a single login, and make payments simple.
As students get ready to apply for their first credit card, they may also want to pull their credit reports and credit scores to see where they stand. Chances are they have a limited credit history, but it’s important to see what’s being reported and that there are no errors or signs of prior fraud that could cause issues for them. They can get their credit reports for free every year from each of the three major credit reporting agencies through AnnualCreditReport.com, and they can get two of their credit scores for free, updated every month, on Credit.com.
For this year’s Best Student Credit Cards, we reviewed many cards to find the top offers out there. After careful consideration, here are the winners.
The Winner: Discover it Chrome for Students
Why It Won: Discover it Chrome for Students is offering even more benefits and rewards this year.
The Benefits: Discover recently announced that it would offer $20 in cash back each school year that cardholders have a 3.0 GPA or higher. This card also offers a wide range of purchase protection and travel insurance policies, and the “Freeze It” feature allows users to temporarily switch off their credit card. As for rewards, cardholders earn 2% cash back at gas stations and restaurants on up to $1,000 in combined purchases each quarter, and 1% on all other purchases. In addition, at the end of the first year of card membership, Discover will double the rewards earned.
The Costs: There is no annual fee for this card, and no foreign transaction fees. Discover will automatically waive the cardholder’s first late fee, and there is no penalty interest rate. This card offers new applicants six months of interest-free financing on new purchases, and the standard interest rate is 12.99%-21.99%, depending on the creditworthiness of the applicant.
1st Runner-Up: Journey Student Rewards from Capital One
Why It Won: Capital One offers strong benefits as well as incentives for students to pay their credit card on time.
The Benefits: Students receive protections such as extended warranty coverage and auto rental insurance. Other benefits include an automatic credit line increase when cardholders make their first five monthly payments on time. They also earn 1% cash back on all purchases, plus a bonus of 25% of the rewards earned each month they pay on time, for a total of 1.25% cash back.
The Costs: There is no annual fee for this card and no foreign transaction fees. The standard interest rate is 19.8% for all applicants.
2nd Runner-Up: BankAmericard Travel Rewards Credit Card for Students
Why It Won: This card offers students strong benefits with low interest rates and fees.
The Benefits: Students earn 1.5 points per dollar spent, and each point is worth one cent towards travel reservations with no blackouts or restrictions. In addition, students who also hold a checking or savings account with Bank of America can receive a 10% bonus on their rewards. New cardholders can also receive 10,000 bonus points if they make $500 in purchases within 90 days of opening an account. Other account features include mobile banking, text banking and electronic alerts.
The Costs: There is no annual fee for this card and no foreign transaction fees. New cardholders receive 12 months of interest-free financing on new purchases, and the standard interest rate is 14.99-22.99%, depending on the creditworthiness of the cardholder.
At publishing time, Discover it Chrome for Students and Journey Student Rewards from Capital One are offered through Credit.com product pages, and Credit.com is compensated if our users apply for and ultimately sign up for either of these cards. However, this relationship does not result in any preferential editorial treatment.
Note: It’s important to remember that interest rates, fees and terms for credit cards, loans and other financial products frequently change. As a result, rates, fees and terms for credit cards, loans and other financial products cited in these articles may have changed since the date of publication. Please be sure to verify current rates, fees and terms with credit card issuers, banks or other financial institutions directly.
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