MoneyRates has partnered with CardRatings for our coverage of credit card products. MoneyRates and CardRatings may receive a commission from card issuers. Opinions, reviews, analyses & recommendations are the author’s alone, and have not been reviewed, endorsed or approved by any of these entities.

Best Student Credit Cards of April 2020

| Money Rates Columnist.
min read

studentsIt might sound crazy to think about getting a student credit card right now if you're a college student at home, waiting for the coronavirus threat to subside.

But using your downtime productively to plan ahead isn't crazy at all.

In fact, applying for a credit card now might be a good thing to do if you're just starting out in life.

Why now?

As you likely know, credit cards are some of the most effective tools for building a solid credit history.

But good credit doesn't happen overnight. You'll need time to build your reputation for handling credit well. It's best to start slowly and manage your finances tightly if you want to enjoy the benefits of an excellent credit rating.

Why you need good credit

Your credit history can affect any number of financial transactions you make in life. If you hope to purchase a car or home with reasonable terms in the future, you'll be in much better shape if you have good credit.

But you don't have to wait that long. A good credit score may also help pave the way whelin you rent your first apartment.

How a student credit card can help

Lenders recognize that college students are new to the world of credit and finance, which is why it can pay to get a student credit card - that is, a credit card designed for college students.

Having a student credit card can help you establish a good credit history by...

  • ... reporting payments to credit bureaus
  • ... keeping fees and interest rates low
  • ... offering features that support student lifestyles and goals

But not all student credit cards are the same, so you'll want to look them over carefully and compare features before you just apply for the first one you see. With that in mind, here are our best student credit card picks of March 2020.


Best Student Credit Cards for Cash Back - Citi Rewards+ Student Card

If credit cards were kids in high school, cash back credit cards would be the popular kids you'd want to hang out with (though the travel credit cards would be pretty cool friends to have too).

People get excited about cash back credit cards for good reason. You get cash back.

Use them responsibly every month, and you'll never pay interest (if you're paying the entire bill off in full each month by the deadline day). If you do, everything you buy with a credit card could come with some savings.

It's like putting a coupon app on your smartphone and paying with it - and then always getting money with every purchase.

People gripe about credit cards costing money, and they do if you use them improperly. But if you use student credit cards with rewards wisely, you'll save money - and build credit. Win-win!

Student Credit Card for Cash Back Purhcase Intro/Period Regular APR Annual Fee Foreign Transaction Fee Credit Score Needed
Citi Rewards+ Student Card APR: 0%

Period: 7 months

14.49% - 24.49% (Variable) $0 3% Good
Petal® Visa® Credit Card APR: N/A

Period: N/A

14.49% - 25.49% Variable $0 N/A Excellent, Good, LimitedHistory, NoHistory, Limited, NoCredit

Citi Rewards+ Student Card

If you're looking for a credit card that kind of serves as a way to constantly save money, the Citi Rewards+ Student Card is a card worth considering.

Every time you buy something, the card rounds to the nearest 10 points every purchase you make. (So if you pay $12 for something, you'll get 20 points, for example.) You'll also receive 10% of your points back for the first 100,000 points you redeem every year (Full disclosure alert: Citi is a CardRatings advertiser.)

So what do you do with all these points?

You redeem them for gift cards (i.e., Olive Garden. Macy's, iTunes) or you can use them to shop online (i.e., Amazon.com).

Citi Rewards+ Student Card

Citi Rewards+<sup>℠</sup> Student Card

Cash Back Rewards: Every time you buy anything, the card rounds to the next 10 points

Bonus: For the first 100,000 points you redeem every year, you'll get 10% of your points back.

Intro APR: 0%

Intro Period: 7 months

Regular APR: 14.49% - 24.49% (Variable)

Annual Fee: $0

Foreign Transaction Fees: 3%

Credit Needed: Good

Comparing the Citi Rewards+ Student Card on fees and APR

It's worth noting that the Citi Rewards+ Student Card has a foreign transaction fee of 3%. If you plan to use the card abroad, then you'd be spending 3% more on purchases, so this wouldn't be the best card to use while traveling internationally. On the other hand, you may not be doing too much traveling right now, anyway...

Features in favor: The Citi Rewards+ Student Card has no annual fee; and for the first 7 months, the interest rate on purchases is 0% - after which it goes to 14.49% - 24.49% (Variable).


Petal® Visa® Credit Card

The Petal® Visa® Credit Card isn't a flashy credit card; but for a student looking to build credit, it's pretty good.

Don't have a credit score or much of a credit history? You can link to your bank account to demonstrate that you have, well, money. If you're approved, your credit limit will start at $500 and can go up to $10,000.

Have a terrible credit history? You may be denied. This is a card aimed at people who don't yet have credit, like a college student.

The Petal® Visa® Credit Card reports to all three major credit bureaus, though all reputable credit cards will do that.

Petal® Visa® Credit Card

Petal® Visa® Credit Card

Cash Back Rewards: Up to 1.5% cash back after making 12 on-time monthly payments. 1% cash back on eligible purchases right away.

Intro APR: N/A

Intro Period: N/A

Regular APR: 14.49% - 25.49% Variable

Annual Fee: $0

Foreign Transaction Fees: N/A

Credit Needed: Excellent, Good, LimitedHistory, NoHistory, Limited, NoCredit


Best Student Credit Cards to Build/Rebuild Credit

These cards aren't as flashy as some of the others - but not everybody can get the best credit cards.

If you have a shaky financial past, where you've missed some payments or closed out an account (it happens), you can understand that a credit card company may not be excited about taking another chance on you.

But these cards probably will.

So if you have poor to no credit and have had trouble getting a student credit card, you may want to look at these three student credit cards. They may get the job done and help you build credit back up, so you can get credit cards with travel rewards and cash back programs in the future.

Student Credit Card to Build Credit Regular APR Annual Fee Foreign Transaction Fee Credit Score Needed
Milestone® Gold Mastercard® 24.90% $35 - $99 (Dependent on credit worthiness) See terms Good/Fair
Avant Credit Card 23.99%. Variable $29 N/A Fair

Milestone® Gold Mastercard®

This is a pretty no frills, basic credit card, but that doesn't mean it's bad. The Milestone® Gold Mastercard® requires no security deposit, for starters, so it isn't a secured credit card.

On the other hand, the annual fee is $35 - $99 (Dependent on credit worthiness). That's fairly steep; but if you pass muster, you may want to get the card because of its lower interest rate.

Milestone® Gold Mastercard®

Milestone® Gold Mastercard®

Rewards: None - This card is strictly for building credit

Regular APR: 24.90%

Annual Fee: $35 - $99 (Dependent on credit worthiness)

Foreign Transaction Fees: See terms

Credit Needed: Good/Fair

Avant Credit Card

The Avant Credit Card is another no-frills card, but one that can help you build your credit history (if you use it responsibly, of course).

There is no penalty APR. So if your payment is late, your interest rate shouldn't go shooting up. That's a big plus; however, you should expect a late fee of up to $39 to be charged in that event.

Avant Credit Card

Avant Credit Card

Rewards: None - This card is strictly for building credit

Regular APR: 23.99%. Variable

Annual Fee: $29

Foreign Transaction Fees: N/A

Credit Needed: Fair


Best Credit Cards for Travel

This category is for students who plan to travel or will be studying abroad.

If you expect to travel in the future, it's best to get a credit card that doesn't charge foreign transaction fees. After all, traveling is expensive and, if your card tacks on a foreign transaction fee, all of your purchases will cost a little bit more. So try to avoid that if possible. But in some cases it may be unavoidable.

In fact, one of the cards on this list has a 1% foreign transaction fee, but that doesn't mean you should stay away from it. If you have poor credit and are also traveling, it may be just the card you need.

On the other hand, if you can use a student credit card that rewards you for traveling, where you get cash back and you can hunt and find good travel deals, well, you're going to have a much more affordable journey.

Student Credit Cards for Travel Purchase APR Annual Fee Foreign Transaction Fee Credit Score Needed
Deserve Edu 20.24% Variable $0 None Good, Limited History, No Credit History
Indigo® Platinum Mastercard® 24.90% $0 - $99 See terms Good/Fair

Deserve Edu

This is a great card for international students who are studying in America.

The Deserve Edu doesn't require a credit history of a social security number, which international students won't have. There's no foreign transaction fee either, so you can use the card abroad and when traveling.

It was designed for students with little to no credit history (and so it's not bad for American students either).

You'll get 1% unlimited cash back earned on every dollar spent. The credit limit is $5,000. There is also a year free of Amazon Prime Student and up to $600 in cell phone protection when you use the card.

Deserve Edu

Deserve Edu

Rewards: 1% cash back on all purchases

Regular APR: 20.24% Variable

Annual Fee: $0

Foreign Transaction Fees: None

Credit Needed: Good, Limited History, No Credit History

Indigo® Platinum Mastercard®

The Indigo® Platinum Mastercard® isn't the flashiest student card on the list; but if you're new to credit, want to travel extensively, and don't feel you can get a credit card with no foreign transaction fee and rewards, you can make an argument that it's okay. See terms on the company's website about the fee they charge for foreign transactions, but it may be less than other cards.

Still, the APR is on the lower side, and you can choose your own card design.

Indigo® Platinum Mastercard®

Indigo® Platinum Mastercard®

Rewards: N/A

Regular APR: 24.90%

Annual Fee: $0 - $99

Foreign Transaction Fees: See terms

Credit Needed: Good/Fair


How to Choose and Use Your Student Credit Card

Everybody's financial situation - and financial personality - is a bit different, which is the main reason you shouldn't just apply for the first student credit card you see.

Choose your student card based on your needs

  • Building/rebuilding credit

    For starters, as you saw if you looked over the nine student credit cards we highlighted, some of them are clearly better than others. But if you have applied to a few credit cards and been denied, because maybe a couple years ago you had a credit card and missed a bunch of payments and closed it out and now have poor credit, the not-so-hot ones start to look far better. In that case, your main mission is likely to rebuild credit.

    When choosing a student credit card, it's best to keep fees and interest rates low, of course. But make sure you select a card that reports to all three credit bureaus so that your record for paying off your credit card balance every month gets longer. Maintaining good financial habits over time is the most important thing to concentrate on when trying to improve your credit history.

  • Earning cash back

    On the other hand, if you've had a part-time job for some time and are earning decent money, or your parents are willing to co-sign a credit card, you may want to try for a student credit card that offers cash back while you build your credit history.

  • Foreign travel

    You may be planning a trip abroad, once the pandemic insanity winds down, in which case you'll want to make sure you get a credit card without a foreign transaction fee, since that'll just make your trip a little more expensive.

Responsible credit card use

Remember that you're building your reputation for handling credit well. So regardless of your situation, using the credit card responsibly should be your primary financial goal.

That is, pay it off every month and never let the balance roll over.

If you do that, your credit score is bound to climb. It may take some time for that to happen; but at some point, having a good credit history can start paying off for you in the form of lower insurance premiums and better financial terms. Keep using credit wisely and somewhere down the road, say in a year or more, if you want to buy a car or a house, you'll be more likely to get a loan with very favorable terms.

Having a credit card handy to make purchases whenever you need to and to help manage your cash flow - that's part of good financial habits. All well and good. But at this point, you should really keep your focus on building your credit history with excellent financial habits.


The Fastest Route to Building Credit

Credit cards are arguably the fastest route to building credit. We say "arguably" because, if you use them irresponsibly and miss payments, it can also be the fastest route to destroying your credit.

But if you know what you're doing, you can use them to build your credit fast.

Here are a few tips.

  • Start off with one credit card

    Sure, you could make an argument that you'd like two or three credit cards; but if you're just starting out, please begin with one. Use it for a year or two. If it goes well, then you can try for a second.

  • Read the terms and conditions

    Before you click on any "apply" button, go through those terms and conditions. There's a lot of legalese there, but you'll find some interesting things, too, like maybe a fee of which you were unaware.

    For instance, if you do a cash advance (that is, use your credit card at an ATM to take cash out), you will spend more money in interest on it than for anything else. Even if you pay back the cash right away, you'll still have to add on the interest you were charged.

    Getting a cash advance isn't a good idea, except maybe in an emergency, and it won't save you money. Fortunately, some student credit cards don't offer cash advances. Reading the terms and conditions can help you learn about the credit card you plan to apply for so you don't have any missteps.

  • Look at that annual fee

    If there is one, that is. You're going to be paying X dollars a year to use a credit card. Sometimes - like if there are generous cash back rewards - it may be worth it. It also may be worth it if you really need the credit card to build your credit. But do take a look at the annual fee and ask yourself if you really want to pay for it.

  • Pay your bills on time

    You want to avoid late fees and the possibility of your interest climbing.

  • Keep your credit utilization ratio to under 30%

    What does this mean? Glad you asked. It's important.

    Lenders like to see you borrowing no more than 30 percent of your available credit. It's just a hang-up they have. They figure if they're going to lend you money, and you borrow all of it, even if you do pay them back before the month is over, they see that as irresponsible.

    You may see it differently. After all, you paid it back on time.

    But they figure that before too long, you may not pay it back on time. So if you have a credit limit of $200, for instance, only borrow $60 worth and pay it off every month. If you keep your credit utilization ratio under 30%, your credit limit should soon climb to, say, $500, and then you can borrow $150 every month.

    Seriously, paying attention to that credit utilization ratio - and never going over it - can really help you develop even better financial habits and help improve your credit quickly.


Credit Score You Need for a Rewards Card

So what type of credit score do you need for a rewards card? Because, yes, that's what we all want - a credit card that gives us money back, or points that we can use to buy gift cards and such.

Well, the bad news, if you have poor credit, is that you need a pretty good credit score. It's impossible to say exactly what that number is. We could say you need a 714, but you may get a rewards credit card with 690. Every credit card is different. Some student credit cards offer rewards if you have no credit history. So it's hard to say.

But a good rule of thumb is that if your credit score is in the 700s, you should be able to get a rewards credit card. If you're in the 600s, it's going to be harder. Maybe impossible, if you're in, say, the low 600s.

That's all the more reason why it's so important to build your credit.


Methodology

So how did we choose some of the student credit cards on this list? Especially, you may wonder, when some of the credit cards were kind of blah. "Is this really the best of the best?" you might wonder.

Well, yes. Because, look, when you're a student, you can't always get the best credit cards. Sometimes you have to go for a no-frills, kind of boring credit card. If we had just offered a list of student credit cards with rewards, that would shut some potential cardholders out, which would be a shame.

So while this isn't a complete list of all the student credit cards out there, we looked at a lot of factors - what cards, for instance, actually seem to get that you're a student and just starting out. Deserve Edu, for instance, gets plaudits for not asking international students for their social security  number and giving a year of free Amazon Prime Student. Very nice.

Much of this is subjective, but we asked ourselves - are these good credit cards for college students? Absolutely, though as we've noted, some of them are better than others.

0 Comment