Best Credit Cards for Students: Building Credit from Day One

Starting college is an exciting chapter filled with new opportunities, challenges, and responsibilities. One important aspect of your financial future that often gets overlooked is building credit. As a student, getting a credit card might seem daunting, but it can be a powerful tool to help you establish good credit habits early. In this post, we’ll explore the best credit cards for students, and why building credit from day one is crucial for your financial journey.

Why Should Students Care About Credit?

Credit isn’t just about being able to borrow money or get a loan. Your credit score is a measure of your financial trustworthiness, and it affects many aspects of your life. Landlords, employers, and insurance companies often check credit scores when making decisions. Building a good credit score while you’re still in school can set you up for better financial opportunities after graduation, whether it’s renting an apartment, buying a car, or even securing a job.

What to Look for in a Student Credit Card

Before diving into the best credit card options, it’s important to understand what to look for. As a student, your needs will differ from those of other consumers. Here are some key features to consider when choosing a card:

1. No or Low Annual Fees – A student credit card shouldn’t come with high costs. Look for cards with no annual fees to keep your expenses low.
2. Low Interest Rates – While the goal is to pay off your balance in full each month, a low-interest rate can help reduce the cost of any balances you do carry.
3. Rewards or Cashback Programs – Many student cards offer cashback or rewards for everyday spending like groceries, gas, and dining.
4. Credit-Building Tools – Some student cards provide access to credit score tracking and tips for improving your score.
5. Introductory Offers – Some cards may offer introductory bonuses like a $50 statement credit after your first purchase, or 0% APR on purchases for a limited time.

Top Credit Cards for Students

Here are some of the best credit cards available for students today, each offering unique benefits tailored to your financial needs:

1. Discover it® Student Cash Back

• Annual Fee: $0
• APR: 0% intro APR for 6 months, then variable APR
• Rewards: 5% cashback on rotating categories (e.g., gas stations, restaurants), and 1% on all other purchases.
• Special Feature: They match all the cashback you earn in the first year, which can lead to some significant rewards. Plus, you can get $20 each school year for having a GPA of 3.0 or higher!

2. Capital One SavorOne Student Cash Rewards Credit Card

• Annual Fee: $0
• APR: 0% intro APR for the first 15 months, then variable APR
• Rewards: 3% cashback on dining, entertainment, and popular streaming services, and 1% on everything else.
• Special Feature: No foreign transaction fees, making it a great option if you’re studying abroad.

3. Bank of America® Customized Cash Rewards Credit Card for Students

• Annual Fee: $0
• APR: 0% intro APR for the first 15 months, then variable APR
• Rewards: 3% cashback on a category of your choice (gas, online shopping, dining, etc.), 2% at grocery stores, and 1% on all other purchases.
• Special Feature: Flexible rewards categories allow you to tailor the card to your spending habits.

4. Chase Freedom® Student Credit Card

• Annual Fee: $0
• APR: Variable APR
• Rewards: 1% cashback on all purchases.
• Special Feature: Earn $50 after your first purchase, and a $20 good standing reward every account anniversary for the first 5 years.

NOTE: This options could be not available at the time you are reading this.

How to Build Credit as a Student

Once you’ve chosen a credit card, the key is to use it wisely to build your credit score. Here are a few tips to keep in mind:

1. Make Payments on Time – Your payment history accounts for a large portion of your credit score, so always pay on time. Set up automatic payments or calendar reminders to avoid missing due dates. Read more…
2. Keep Your Balance Low – Aim to keep your credit utilization (the percentage of your credit limit you’re using) below 30%. If your card has a $1,000 limit, try not to carry a balance over $300.
3. Pay Off Your Balance in Full – If possible, pay off your credit card balance every month to avoid paying interest. This not only builds good habits but also saves you money in the long run.
4. Use Credit Sparingly – It’s tempting to use your credit card for everything, but be mindful of your spending. Only charge what you can afford to pay off.
5. Monitor Your Credit – Many student cards offer free access to your credit score. Keep an eye on it to track your progress and identify any issues.

The Bottom Line

As a student, a credit card is more than just a convenient way to pay for things – it’s a tool that can help you establish a solid financial foundation. By choosing the right card and using it responsibly, you can build credit from day one and set yourself up for future financial success. Just remember to stay disciplined with your spending, pay your bills on time, and monitor your credit score as you go.

With the right approach, you’ll not only enjoy the perks and rewards of your student credit card but also pave the way for a brighter financial future after graduation.