As a student in the USA, you might be considering getting your first credit card. It can be a tempting proposition – a way to build credit, pay for unexpected expenses, and maybe even snag some rewards. But with so many student credit card options available, choosing the right one can be overwhelming.
This guide will equip you with the knowledge to make an informed decision. We’ll explore the different types of student credit cards, key factors to consider when choosing a card, and some of the top options in the market today.
The Different Types of Student Credit Cards
Not all student credit cards are created equal. Here’s a breakdown of the main types you’ll encounter:
- Rewards Cards: These cards offer cashback, points, or travel miles on purchases. This can be a great way to earn something back on your everyday spending, especially on categories you spend a lot on, like groceries or gas.
- No-Annual-Fee Cards: These cards, as the name suggests, come with no annual fee. This can be a good option if you’re just starting to build credit and don’t want to worry about an additional expense.
- Secured Credit Cards: These cards require a security deposit that becomes your credit limit. This is a good option if you have no credit history or bad credit, as your on-time payments will be reported to credit bureaus and help you build credit.
- Student-Specific Cards: These cards are designed specifically for students and often come with lower credit score requirements and features tailored to student needs, like budgeting tools or cellphone insurance.
Also read this: Top Cash Back Credit Card for You in the USA?
Choosing the Right Student Credit Card: Key Factors
Now that you know the different types of student credit cards, let’s delve into the key factors you should consider when making your choice:
- Credit Score: This will determine which cards you’re eligible for. If you have no credit history, you might need to start with a secured card.
- Spending Habits: Think about what you spend the most on. If you eat out a lot, a card with cash back on dining might be a good fit. If you travel frequently, a travel rewards card could be beneficial.
- Rewards Programs: Compare the rewards programs of different cards. Consider the types of rewards offered, the earning rates, and how easy it is to redeem them.
- Annual Fees: Decide if the benefits of a card outweigh the annual fee. No-annual-fee cards might be a better option if you’re just starting out.
- Interest Rates: Student credit cards typically come with high interest rates. It’s important to pay your balance in full each month to avoid accruing interest charges.
- Benefits: Some student credit cards offer additional benefits like purchase protection, extended warranties, or cellphone insurance. Consider which benefits are most valuable to you.
Top Student Credit Card Options in 2024
Here’s a quick overview of some of the top student credit card options available in the USA as of June 2024:
- Discover it® Student Cash Back: This card offers a generous welcome bonus and unlimited cash back on all purchases. It also has no annual fee, making it a great all-around option for students.
- Capital One Quicksilver Student Cash Rewards Credit Card: Another no-annual-fee card, the Quicksilver Student offers cash back on all purchases. It’s a good choice for students who want a simple and straightforward rewards program.
- Capital One SavorOne Student Cash Rewards Credit Card: This card offers higher cash back rewards on dining, entertainment, and groceries, making it a good option for students who spend a lot in these categories. There’s no annual fee either.
- Bank of America® Travel Rewards credit card for Students: This card earns points that can be redeemed for travel or other rewards. It also comes with a 0% introductory APR on purchases for a limited time. However, there is an annual fee.
- Bank of America® Customized Cash Rewards credit card for Students: This card allows you to choose your own cash back category to earn more on, making it a good option for students with specific spending habits. There’s an introductory APR on purchases as well, but there’s also an annual fee.
Building Good Credit Habits as a Student
Using a credit card responsibly is essential for building good credit. Here are some tips:
- Pay your balance in full and on time every month. This will avoid interest charges and demonstrate your ability to manage credit responsibly.
- Only spend what you can afford to repay. Credit cards are a tool for managing expenses, not a free source of money.