A student credit card is easier to qualify for than a standard credit card and can provide a convenient payment alternative for school expenses and emergency expenses. Additionally, utilising your card and paying all of your payments on time will assist you in establishing good credit in the years to come. Student credit cards may assist young adults in establishing credit and developing sound financial habits. Numerous banks and commercial institutions provide credit cards for college students. You may wish to consult a parent or guardian to determine which student card is the greatest fit for you and which perks and features are most beneficial to your present lifestyle.
Prior to applying for and using a student credit card, it’s critical to understand how the application process works (you may require a co-signer) and how you intend to stay current on payments in order to avoid debt. When used appropriately, a credit card may assist college students in establishing and building credit while also allowing them to take advantage of reward programmes and cardmember privileges.
What is a student credit card?
A student credit card is a type of credit card that banks and financial institutions advertise to students and recent graduates. Student credit cards often have a lower credit limit and may have a higher approval rate for students with little or no credit history and limited income. If you are under the age of 21, student credit cards may require a co-signer.
As a college student, you most certainly lack financial resources and established credit history. This can make qualifying for a standard credit card challenging.
Student credit cards, on the other hand, can be a wonderful alternative. They are designed for college students, who typically have low salaries and little to no credit history. They may be excellent instruments for building credit and establishing good financial practices.
In five easy steps, learn how to obtain a credit card as a student.
When you’re balancing a full-time class schedule, homework, and possibly a part-time job, the last thing you need is a lengthy credit card application procedure. Fortunately, you can identify and apply for the ideal student credit card in just a few simple steps.
Check your eligibility first.
To be eligible for a student credit card, you must normally meet the following requirements:
You must currently be enrolled in a college or university; some credit card issuers will want you to input your school’s details or your college email address on the application.
To apply for a card, you must be at least 18 years old. If you are under the age of 21, you must demonstrate that you have a stable source of income (a part-time job is usually acceptable) or the card will require a cosigner.
You must be a citizen or permanent resident of the United States with a valid Social Security number.
Conduct a search for student credit cards
When searching for the best credit cards for students, it’s a good idea to evaluate several different cards to ensure you’re receiving the greatest fit for your needs. Several aspects to examine include the following:
Annual percentage rate (APR): The APR, or annual percentage rate, is effectively the interest rate on purchases. The higher the number, the more interest you’ll pay. By paying off your balance in full each month, you can avoid incurring interest.
Certain student credit cards provide rewards programmes that allow you to receive benefits such as cash back on your purchases. For instance, the Discover it Student Cash Back card offers 5% cash back on chosen quarterly purchases in rotating categories such as grocery stores, petrol stations, and even Amazon. Additionally, you’ll receive 1% cash back on all other purchases.
Sign-up bonuses: You may frequently get a sign-up bonus just by making ordinary transactions and loading your wallet with cash. For instance, Discover will match your first year’s cash back earnings. This implies that if you earn $500 in cashback points, Discover will add another $500 to your account.
The Bank of America Cash Rewards Credit Card for Students earns you $200 in online cash rewards once you spend $1,000 in the first 90 days of account opening. By using your card to purchase textbooks or other essentials, you can quickly earn the bonus.
As a student, you’re likely to qualify for a credit card with a low credit limit. However, some cards will increase your credit limit if you demonstrate your ability to make timely payments. For instance, the Chase Freedom Student Credit Card automatically increases your credit limit once you make five consecutive on-time monthly payments within ten months of account establishment.
Annual fee: Certain credit cards charge an annual fee that must be paid each year regardless of whether the card is used. If you’re on a limited budget, consider a no-annual-fee credit card. There is no annual fee on the Discover it Student Cash Back Card, the Chase Freedom Student Credit Card, or the Bank of America Cash Rewards Credit Card for Students.
Additional advantages include the following: While student credit cards often do not offer extensive benefits, you may be able to obtain additional benefits such as extended warranty protection or purchase protection, which can safeguard you against the loss or theft of new things. Certain cards even give extra bonuses or promotions to students who maintain a certain grade point average. With Discover it Student Cash Back, you’ll receive a $20 statement credit for each school year in which your grade point average is 3.0 or better, up to five years.
Complete and submit your application
The majority of credit card companies allow you to apply online for a student card. However, certain companies, such as Chase, require students to apply in person at a branch location.
In either case, the application process is typically straightforward and straightforward. Typically, the corporation will ask for your name, address, phone number, and Social Security number. It may ask for the name of your school, the year you are enrolled, whether you are a full-time or part-time student, and the monthly housing cost you currently pay. If you are currently employed, even part-time, you must provide information about your income.
After you submit your application, the credit card firm will perform a hard credit pull, which means it will examine your credit record in order to evaluate whether or not to accept you for a card.
If your application is approved, you will typically receive notification immediately. In some instances, the employer may want extra documentation, such as evidence of your student status. If that occurs, the company will send you a notification requesting documentation; each company should provide you with a list of acceptable forms of proof.
If your application is denied, you should receive a letter explaining why. For instance, your credit score may be too low or your income may be insufficient.
Make prudent use of your student credit card.
If you are approved for a student credit card, you are well on your road to establishing a positive credit history.
However, it is critical to adhere to some recommended practises in order to create and keep good credit:
Establish a budget: While a credit card gives you greater purchasing power, it’s easy to go overboard. To avoid this, prepare a budget that details all of your monthly spending and revenue.
Utilize your card exclusively for necessary purchases: While it may be tempting to use your card to pay for luxuries such as clothing or holidays, this can be a costly mistake. Rather than that, limit your card use to necessary purchases such as textbooks, groceries, and gas.
Each month, pay off your statement balance: By paying down your account balance in full each month, you can avoid hefty interest charges.
Maintain a timely payment schedule for all of your obligations: Making on-time payments on all of your debts is the single most important factor determining your credit score. Establish automated payments to ensure that you never miss a payment.
Additionally, there are some things you should never do with a credit card, so be sure you are aware of the disadvantages prior to applying.
Unable to obtain approval? Consider the following choices.
Regrettably, not everyone who applies for a student credit card will be approved. If you are no longer a student, do not have a sufficient income, or have a credit score that is too low, you may be ineligible.
However, do not surrender! There are several ways to obtain a credit card and establish a credit history:
Become an authorised user: If you have a parent or relative with strong credit, they may grant you access to their account as an authorised user. You can use the card just like a regular credit card, but the bill will be paid by your parent or family.
Purchase a secured credit card: A secured credit card requires you to make a deposit that serves as your credit limit. As you make payments, your behaviour is reported to credit agencies, which helps you improve your credit score and qualify for traditional credit cards.