Student credit cards are cards designed for college students who are looking for a first credit card. Functionally, student credit cards are no different from regular credit cards: You make purchases, earn rewards (in some cases), and pay interest if you carry a balance. Student cards often have less-stringent credit requirements than regular cards because most student applicants tend to have weak or nonexistent credit histories.
- Student credit cards are primarily for students enrolled full-time or part-time in a college or university.
- A student credit card allows you to start building credit.
- Most major credit card issuers offer at least one student credit card; some even offer rewards on credit card purchases.
- Becoming an authorized user or applying for a secured card are alternatives to student credit cards.
Student Credit Cards vs. Other Credit Cards
Although they share a lot in common with other credit cards, student credit cards have features tailor-made for students, some required by law.
Student credit cards are designed for young adults enrolled in college who may be just starting out with credit. Like other credit cards, students must be 18 years or older to apply. To confirm student status, the credit card application may ask you for specific details about your school enrollment, like your year in school and expected graduation date. You may have to provide proof of your enrollment status to qualify. Also, you’ll need to prove you have the financial means to pay off a credit card, whether it’s through your income or your assets.
Some smaller issuers may have creative requirements for applicants. Alabama Credit Union requires students to take a short budgeting class before applying for its student card.
Non-student credit cards don’t require graduation details or school enrollment. The typical application asks for your basic information, income, and mortgage or rent payments. In many cases, rewards credit cards will require better credit from applicants than student credit cards would.
In most cases, student credit cards that offer rewards tend to have lower rates and bonuses than non-student credit cards. Capital One’s card offerings are a good example of this. The Journey Student Credit Card has a 1% cash-back rate that jumps to 1.25% if you pay your bill on time. The non-student Quicksilver card, on the other hand, requires excellent credit but has a 1.5% cash-back rate and a $150 bonus for new cardmembers if you can spend $500 in the three months.
Fees & APR
Student credit cards have all the same fees (late fees, returned payment fees) that regular credit cards have, and the fees are typically the same. For example, the Bank of America Travel Rewards for Students and the Bank of America Travel Rewards have the same annual fee ($0), balance transfer fee (3% or $10, whichever is greater), and late-payment fee ($40).
When it comes to APR, student credit cards tend to have rates lower or equal to the issuer’s non-student cards. The two Bank of America cards have the same APR and the same introductory APR offer.
In fact, student credit cards tend to have the lowest average APR of all consumer credit cards, according to our monthly survey of average credit card interest rates. However, there will be exceptions. For instance, the Journey Student Rewards from Capital One’s APR is considerably higher than the best APR the Quicksilver card offers.
Look for student credit cards with APRs that equal or beat an issuer’s non-student counterparts. Bank of America and Discover’s student cards tend to have reasonable rates.
Pros & Cons of Student Credit Cards
Students may be able to qualify for a credit card despite having new or thin credit
Fraud protection can make credit cards safer than using a debit card
Access to rewards that cater to students
Good interest rates
Certain student credit cards may have high interest rates
Student credit cards aren’t a long-term solution
- Students may be able to qualify for a credit card despite having new or thin credit: Capital One Journey, for example, allows students to qualify with fair credit.
- Fraud protection can make credit cards safer than using a debit card: Your maximum liability for unauthorized debit card charges is $500. Many credit cards have zero liability protection, which means you won’t be responsible for any fraudulent charges made to your credit card.
- Access to rewards that cater to students: The Discover it Student credit card, for example, offers rewards for good grades.
- Good interest rates: Student credit cards tend to have the lowest average interest rates among consumer cards, which reduces your costs if you have to carry a balance.
- Certain student credit cards may have high interest rates: The Capital One Journey Student card, for example, has an APR of more than 25%, which is significantly higher than the average student card APR.
- Student credit cards aren’t a long-term solution: These cards are more like starter cards that can help you understand the basics of credit, interest, and rewards. As your credit scores strengthen, you might be able qualify for cards with better 0% APR offers, more features and benefits, and higher rewards rates. Keep your student card open, though; a zero balance on a credit card can help your credit score, as will the age of the account.
Regulations for Marketing Student Credit Cards
Prior to the Credit Card Act of 2009, colleges and universities could enter into lucrative marketing agreements with credit card issuers to provide student contact information and allow access to campus events. In 2008, for example, the University of Iowa Alumni Association disclosed that it received around $1 million in annual revenue just from one credit card issuer.
The law now requires schools to disclose to the public and the Consumer Financial Protection Bureau any marketing agreements with student credit card issuers. This transparency helps students make better-informed decisions about credit cards that are pitched to them by school-affiliated organizations.
In addition to disclosing any financial relationships, credit card issuers are not allowed to give out gifts, like a free T-shirt or pizza, in exchange for a student completing a credit card application on or near campus, or at any school-related event. These types of incentives could lead students to make a decision about a card just because of what they get in return, not because of what the card offers (or doesn’t offer).
Upgrading Your Card After Graduation
Once you’ve graduated, you may want to close your student card and get a better rewards card. Remember, though, that keeping your first credit card open may benefit you. Your credit age—the amount of time you’ve been using credit—is 15% of your credit score. Having your oldest credit card open for a long period of time boosts your credit score by showing that you have more experience using credit.
Start by calling your credit card issuer after you’ve graduated to find out whether you can upgrade your card. Converting to another product with the same credit card issuer would allow you to keep your account history, a factor that could help maintain your credit score.
If you close a credit card, it doesn’t disappear right away. The account will stay on your credit report for up to 10 years before dropping off.
Alternatives to Student Cards
Young adults who want to jumpstart their credit and aren’t in college, don’t have independent income, or have been turned down for a student credit card still have options.
You can become an authorized user on someone else’s credit card. As an authorized user, you’ll have the ability to make purchases—if the primary cardholder allows it—but no responsibility to make payments. Once you’re added as an authorized user, all the card’s payment history is added to your credit report and helps boost your credit score, allowing you to qualify for your own credit card.
A secured credit card is another option. You’ll make a deposit to serve as collateral for your credit card balance, but you’ll get your deposit back as long as you keep the account in good standing. Depending on the card you choose, you may be able to convert to an unsecured credit card after several months of responsible use. Even if you don’t have the option to convert the card, you could apply for an unsecured card once you’ve built a strong payment history.