Building Your Credit in College
College is a time when many students get their first tastes of financial freedom, which often includes student loans and first credit cards. Student loans can be a great opportunity to start building credit history, and when used responsibly, a credit card can further demonstrate your ability to manage debt and secure your financial future. As a student you are just starting to build your credit history, and it is essential to be smart and proactive from the beginning.
This section is primarily designed for college students. If you’re in high school, start here.
If you are a non-traditional student, check out this page.
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A credit score is a numerical value based on an analysis of personal financial information included in your credit report that determines your creditworthiness, or the likelihood that you’ll default on your debt obligations, to lending institutions. Read More ›
It’s not as hard as it seems. Many college students get overwhelmed at the thought of actively building their credit. Common misconceptions lead them to believe that a good score is only possible with an auto loan, mortgage, and high paying occupation. Read More ›
As a college student you have an advantage when it comes to starting to build credit. Lenders are aware that you haven’t had the time to procure a perfect score and are willing to help, sometimes offering instant approval for student credit cards. Read More ›
One aspect of any card you’ll want to pay close attention to is the annual percentage rate, or APR. If you don’t pay your balance in full, this can quickly become a major cost. Additionally, make sure you check for annual fees, late fees, and other non-interest fees. Read More ›
When considering a student credit card it is essential to understand all of the terms and conditions before you apply. As mentioned above the interest rate and annual fee are major factors that can make a credit card work for you, or you work for a credit card. Read More ›
Equally as important as choosing the right card is handling it responsibly. When applying for a first credit card many students make the mistake of applying for multiple cards in a short period of time hoping to be approved for at least one. Read More ›
Students loans come in 2 general types: federal (government-backed) and private loans. Loans, like credit cards, have interest rates, but instead of the revolving interest of credit cards, loans are typically paid off on an installment plan. This means that the interest rate will not vary throughout the course of the loan. Like other loans and debt, student loans will have an impact on your credit report. Read more >
If you’ve perused the above material and feel like you have a good grasp of how credit cards and credit reports work, you can take a look at our comprehensive guide to student loans. Learn about the available repayment plans and which might work best for you, as well as how to get a head start on paying your loans back without getting bogged down in heavy fees. Read more >
Check out our Study Abroad Resources.
Our Editor Picks for Best Student Credit Cards
The cards on this page have been chosen from the widest possible selection of cards that we could find when the page was last updated on February 16, 2015. Although Credit Card Insider does receive compensation from some card issuers as advertisers, this does not in any way influence our choice of cards or the order that cards appear on the page. We have attempted to determine the best cards in this category, regardless of our advertising relationship with the issuers.
Learn more about how we rate credit and charge cards.
|Discover it for Students with $20 Cash Back||BankAmericard Cash Rewards Credit Card for Students|
Building good credit with financial responsibility is a valuable lesson you can learn in college, because how you manage that first credit card will help determine your credit score. The higher your credit score, the more opportunities you’ll have. Your credit score can affect your eligibility for apartment rentals, car insurance, cell phone plans and job opportunities. A good FICO score can give you favorable terms on everything from interest rates to auto loans.
The team at Credit Card Insider has selected the following cards as the best student cards right now. These two cards are issued by large national issuers, but if you have a local credit union, that may be your best bet. Credit unions can often offer much lower interest rates on cards compared to banks, but we generally don’t discuss specific cards from credit unions since they vary so much in availability from one region to another. For more details about our most recent picks, see John Ulzheimer’s recent post on The Insider.
- Limited Credit Needed
- No Annual Fee
- Up to 5% Cash Back
- Annual Fee: $0
- Interest Rate: 12.99% – 21.99%* Variable
Quick Card Facts
- Experience our cash rewards with $20 cash back after you make your first purchase within 3 months of approval.*
- No annual fee. No overlimit fee. No foreign transaction fee. No late fee on your first late payment. And paying late won't increase your APR.*
- 5% Cashback Bonus for gas and ground transportation on up to $1500 in purchases from Jan. through Mar. 2015 after you sign up for 5% Cashback Bonus. 1% cash back on all other purchases.
- Free FICO® Credit Score on monthly statements, online and in our mobile app.*
- Free text alerts can remind you when your payment is due. And free mobile app helps you stay on top of your account.
- 100% U.S.- based customer service - day or night.
- Each Discover purchase is monitored. If it's unusual, you're alerted by e-mail, phone or text-and never responsible for unauthorized purchases on your Discover card.
- *See rates, rewards, free FICO® Credit Score terms and other info by clicking “Apply.”
Though there’s no 0% interest rate period with this card, it includes some other valuable benefits like one waived late fee if you happen to forget a payment, along with the ability to pay your bill right up until midnight the day it’s due. You’ll get $20 in the form of a cash back rewards promotion when you open the card, and earn 5% cash back on revolving categories, and 1% cash back on all other purchases. Thanks to a partnership with Amazon, you can easily apply the rewards you’ve earn with the card towards your Amazon purchase at checkout, which can help you save some on any textbooks you might order from the site.
- Strong Cash Back Program
- $100 Cash Bonus
- 0% Intro APR
Limited / No Credit
- Annual Fee: $0
- Interest Rate: 12.99%-22.99% (Variable)
Quick Card Facts
- 1% cash back on purchases everywhere, every time
- 2% at grocery stores and 3% on gas for the first $1,500 in combined grocery store and gas purchases each quarter
- Choose how you want to receive your cash. Redeem as a direct deposit into a Bank of America® checking or savings account or receive a statement credit.
- No annual fee
- Access to Ultimate Money Skills™ for tips on building credit, budgeting and more
- Mobile Banking and text alerts to keep you on top of your finances
- Fixed payment due date so you'll always know when your payment is due
- As a special bonus, earn a $100 cash rewards bonus after you make at least $500 in purchases in the first 90 days of account opening
With 0% financing for 12 months, no annual fee, 3% cash back rewards on gas, 2% on groceries (for the first $1,500 in purchases in those categories in each quarter), 1% on everything else—AND a $100 cash rewards bonus for charging $500 in purchases within 90 days of account opening, you can get paid for building your credit– if you play this card’s benefits right! Additional card features include text alerts and mobile banking, and fixed payment due dates, all of which can help you learn to keep balances manageable, and ensure that you never miss a payment. If you have a checking or savings account with Bank of America, you’ll earn an additional 10% bonus for depositing your cash back rewards into the account—making it easy to save money (because you’ll never have to part with it).
What Makes A Good Student Credit Card?
Creating A Good Credit Score
There are several factors that go into building good credit:
- Never exceed your credit limit
- Pay at least the minimum monthly payment
- Pay before the due date
- If possible, pay the entire balance every month
- Pay more than the minimum whenever you can
- Don’t charge anything you can’t pay off in 30 days
- Use credit sparingly
What To Look For In A Student Card
There are several things to look for when choosing your first credit card. Like everything else, a credit card is a product, so you’ll want to choose a card that best meets your needs and gives you the most value.
Many student credit cards offer interest rates that fall within a certain range. Which rate you’ll be charged is determined by your current credit score. When you apply for this type of card, there’s no way to determine what your interest rate will be. It could be anything between 11.15% and 21.99%. If you have no previous credit history, you can expect to be charged the highest interest rate.
Don’t pay an annual fee. If you can’t qualify for a no-annual-fee card, apply for a secured card. You’ll need to open a savings account to serve as collateral against your card. The amount you deposit will determine your spending limit. After about one year, if you’ve handled the card responsibly, you’ll probably qualify for an unsecured card.
It’s better to get just one credit card with a spending limit that covers your needs rather than getting numerous cards with high limits. This will help you keep spending in check while making repayments simple. Don’t apply for multiple cards at the same time, as this can lower your credit score. Choose the best card for you, and apply for that. If you get refused, then apply for the next best card.
Rewards programs can put a bit of extra money in your pocket even as you spend, but watch out for cash back categories that change every month. It’s better to go with 1% cash back on all purchases than with 5% cash back that’s only good for certain purchases.