Getting your first credit card is a big deal – and a big risk. Your credit score is something you’ll carry with you for the entirety of your life. It may go up, it may go down, but it’s going to follow you around. Learning financial literacy can be difficult on top of the pressures of college. That’s why many banks and credit card companies have developed cards especially for students and young people. These cards are designed to provide helpful rewards, build your credit, and have some built-in protections against your worst choices.
Credit cards provide financial help for students at college, but they need to be used wisely. Take advantage of financial literacy tips for college students provided by the school and even the credit card providers themselves. You want to graduate college with as little debt as possible outside your student loans, and learning how to use credit cards wisely helps you minimize your card balances while building your credit score.
1. Capital One Quicksilver Cash Rewards
The Capital One Quicksilver Cash Rewards card is one of the best credit cards for beginners. It’s a no-frills rewards card that has no annual fee and a generous purchase intro APR of 0% for the first 15 months after opening the account. There’s a $200 cash reward for spending $500 in the first three months of the card. It won’t take long for a college student to spend $500 on a card and earn the bonus, making the Capital One Quicksilver Cash Rewards card one of the best credit cards for college students.
The card also has an unlimited 1.5% cash back on all purchases which can be used for statement credits, purchases at Amazon.com, and Paypal for convenience. Cardholders get all the major perks offered by Capital One, but there is a difference in what’s offered for a standard Visa Platinum and a Visa Signature card. One of the aspects that makes this one of the best credit cards for colleges students is the fact that the card comes with Capital One travel perks to help students buy tickets and get miles for flights home. After the 0% intro APR expires, the rate can be anywhere from 14.99% to 24.99% and is variable.
2. Capital One SavorOne Student Card
The Capital One SavorOne student card is one of the best cards for 18-year-olds due to the fact it comes with a lot of perks that are aimed at the younger college student. It features an unlimited 1% cash back reward for all purchases, and unlimited 3% cash back for everyday purchases at most grocery stores, streaming services, dining and more. There’s also 8% cash back for purchases on Vivid Seats tickets through January 2023. The card features rotating reward categories throughout the year, a feature that requires tracking in order to take advantage of them. However, with perks such as cash back for entertainment purchases, a student has an incentive to pay attention to get the rewards and use them.
The card has few fees overall, and doesn’t have an annual fee, but does require a credit score to open the account. It also has a higher-than-average variable APR of 26.99%. Cardholders gain access to protections that include doubled warranties for devices purchased with the card, price protection that reimburses the difference of an item if the price drops within 120 days from the date of purchase, and paying a cellphone bill with the card triggers the card’s protection plan for repair or replacement of a lost or broken cell phone.
3. Citi® Double Cash Card
The Citi Double Dash Card is another one of the best credit cards for first timers due to its rewarding users for their fiscal responsibility. The card offers 2% cash back on all purchases, but here’s the catch: You have to pay back the entire balance due in order to get the full 2% cash back. Otherwise, you only get 1% cash back on purchases. This is one of the best credit cards for students due to its unlimited cash back and the fact that it’s a basic, few-frills card with excellent security features. In the event a student loses their card, Citi’s Lost Wallet Service replaces a lost card within 24 hours and provides you with emergency cash if needed. This feature can give parents peace of mind that their son or daughter has access to emergency money and won’t have to wait a long time for a replacement card.
Another feature that makes this one of the best credit cards for students is the fact there’s no annual fee that can add an unpleasant surprise to a monthly statement. The average APR ranges from 13.99% to 23.99 depending on credit rating, and is variable. The Citi Double Cash Card can be one of the best credit cards for beginners due to encouraging fiscal responsibility in the form of paying off the balance every month in order to earn more cash back. And the extra cash back bonus can act as financial help for students at college when they’re short on money and can’t wait for funds to be sent.
4. Discover it® Student Cash Back
The Discover It student cash back is arguably the best credit card for college students because it doesn’t require a credit history, and it offers bonuses to students who maintain good grades as well as offering its cash back benefits that are found on its other credit cards. Discover offers 1% cash back on all purchases and 5% cash back on purchases made from rotating categories. The rotating categories change every three months and include rewards for buying groceries and gasoline and buying merchandise from various retailers. There’s also a purchase intro of 0% which can make it easier for a student to buy things they need for school and daily life, then pay off the balance without paying interest.
What makes this one of the best credit cards for beginners is the fact the card doesn’t cost a lot to use, has generous rewards as a general rule, and a lower variable APR rate that ranges from 12.99% to 21.99%. It doesn’t have an annual fee, matches all cash back earned in the first 12 months of holding the card, and has a $20 statement credit for each academic year that a student holds a 3.0 GPA or higher for up to five years.
The Discover it Student card is also one of the best cards for first timers due to the fact it waives the first late payment fee and doesn’t hike the APR as a penalty. About the only major drawback to this card is the fact there are few benefits apart from the ones already listed. However, when it comes to learning the basics of credit card management, this is one of the best credit cards for students who are starting out.
5. Journey Student Rewards from Capital One
The Journey Student Rewards card from Capital One is one of the best credit cards for students who plan on studying abroad and would like some cash back for their purchases. It may not be one of the best credit cards for first timers because it requires an existing credit score, something that younger college students may not possess. However, for students who have a credit score, it is definitely one of the best cards for beginners as it rewards good fiscal behavior, has no annual fee, and has no foreign transaction fees. The Journey Student Rewards card has unlimited 1% cash back on all purchases and raises it to 1.25% when the card is paid on time.
Another benefit to carrying the card comes in the form of an automatic consideration for a higher credit limit after six months of on-time payments. Pay for streaming services with the card and get a monthly $5 bill credit for up to 12 months. The only major drawbacks to this card is the fact it doesn’t offer some of the perks provided by other student credit cards from Capital One and features a variable APR of 26.99%.
How to Use Credit Cards
Credit cards are lines of credit that enable you to borrow cash when you need it, then repay it later. The most sensible way to use a credit card is to use it in lieu of cash, and not think of the card as an extension of the cash you have available to you. This way, you purchase items with the credit card and only buy the items you can afford to pay for from your bank account. When the bill comes due, you pay off the bill and avoid paying interest on the balance.
Building your credit history as soon as you’re able to is something that will work in your favor over time as just about every major transaction you’ll make involves your credit score. Renting an apartment or buying a home requires a credit check, and you’re more likely to get the apartment or get a favorable interest rate on your mortgage if your credit is good. The same goes for buying a car or any major purchase that you decide to finance. Lenders reward borrowers with good credit in the form of lower interest rates as well as make you jump through fewer hoops to get financing.
Sometimes you need to make a large purchase for school, such as a laptop or a piece of furniture, and the credit card is your best option for making that purchase. If you have cash to spare, use that cash for part of the purchase and use the card for the rest. In the event you get bonus points for purchases, hold the cash aside, make the entire purchase on the card, and use your cash to pay off a large part of the balance. You’ll want to pay the remaining amount as soon as possible to minimize the amount of interest you pay on a balance.
However, if you do find you need to carry a balance, try to maintain as small of a balance as possible. The average annual percentage rate of credit cards is anywhere between 15% to 24%. That means you’ll 1.25% to 2% in interest when you carry a balance. For example: you have a $1,000 balance on a credit card with 15% interest at the close of the month. The card issuer will charge you $12.50 in interest which gives you a balance of $1,012.50. The next time you make a payment, you have to pay the interest along with a portion of the principal.
Have your parents add you as an authorized user on their credit card
In the event you don’t want to get a credit card during your student years, you can still build your credit and have a credit card through your parents. That way, parents can provide financial help for students at college that works when other forms of payment aren’t available. Parents can get their college kid a credit card under their credit rating and give you access to their line of credit as an authorized user. The bank will issue you a card in your name and give you all the card privileges as allowed by your parents. Parents can set a maximum credit and purchase limit to help you keep your spending in check.
An authorized user gets the benefit of owning a credit card without using their own personal credit score, and gains the bonus of building their credit score. Becoming an authorized user on a parent’s credit card account is one of the best credit cards for college students as it helps them build credit while maintaining fiscal discipline. Students gain the benefit of having a financial safety net in their wallet without running the risk of getting heavily into credit card debt before graduating.