The biggest pros of student credit cards are easy approval, being able to build credit and the chance to get better rewards, interest rates and fees compared to non-student credit cards for no credit. The biggest cons of student cards are low credit limits and the possibility of adding to your school debt. Although student credit cards have both pros and cons, the pros outweigh the cons if you are responsible.
Pros and Cons of Student Credit Cards
Students can get approved with limited credit history
Low credit limits
Opportunity to build credit with monthly reporting to 1-3 major credit bureaus
Negative impact to credit score if bills not paid on time
Some cards teach responsible habits by giving bonus rewards for on-time bill payments and/or good grades
Temptation to overspend and possibly add to school debt
Interest rates and fees are often lower than those on other starter credit cards
High interest rates compared to credit cards for above-average credit
Better rewards than similar non-student cards
Worse rewards than elite cards for above-average credit
If used responsibly, a student credit card can be a good way to build positive credit history before you even graduate. If you want some guidance on how to build credit with your credit card, check out WalletHub’s first-time credit card tips.
Yes, student credit cards are a good idea, as long as they are used responsibly, because they give students the opportunity to build credit cheaply while earning rewards on purchases. Student credit cards tend to offer lower fees and better rewards compared to general-consumer cards for applicants with limited credit. Because students will have increased earning potential after graduation, credit card issuers are often willing to extend above-average offers to college students in order to gain loyal customers for decades to come.… read full answer
Why Student Credit Cards Are a Good Idea
Emergency Spending Power and Convenience
Ideally, you should pay your credit card bill in full every month to avoid interest charges and maintain good credit, but college life can be costly. The good news is that some student credit cards come with 0% introductory APRs on purchases, which means that you could use your new card for a big-ticket item and repay it over several billing cycles without incurring any interest. Plus, having a credit card on hand can help cover unexpected expenses, such as a hospital bill or car repairs.
Rewards for Shopping
If you're spending money anyway, you might as well get some of it back. Most student credit cards offer at least 1% cash back on purchases. Some student credit cards even throw in bonus rewards for maintaining a history of on-time payments or for spending a certain amount within the first few months your account is open.
It is never too early to start building credit history. Since most student credit cards report to all three of the major credit bureaus, paying your credit card bills on time and keeping a low credit utilization level throughout your college career could add years of positive information to your credit report.
In other words, getting a student credit card as soon as possible can help you reach the kind of credit score you'll eventually need to rent an apartment, take out a mortgage, or even qualify for certain jobs.
Protection Against Fraud
All consumer credit cards, including student cards, guarantee zero liability for unauthorized purchases. This means you will not be financially responsible for charges you didn't approve.
You don't always get the same level of coverage with a debit card. Plus, credit card purchases don't come directly out of your bank account, so you'll have time to dispute fraudulent charges before even paying the bill. All in all, paying for everyday expenses with a credit card is far safer than using a debit card or cash.
Using a student credit card before you graduate to general-consumer cards and higher credit limits means you can learn from mistakes while the stakes are still low. Getting some practice with a student card can also help you develop good habits early, such as keeping track of your spending, meeting due dates, and regularly reviewing your transaction history.
Finally, it's worth remembering that not all student credit cards are created equal, and some might offer better benefits than others. To find the right card for you, check out WalletHub's editors' latest picks for the best student credit cards.
Yes, student credit cards do build credit when they’re used responsibly. All major credit card companies report information about student credit card accounts to credit bureaus, usually monthly, and that information builds cardholders’ credit if it reflects on-time payments. The best student credit cards are low-cost and offer rewards in addition to helping students build their limited credit.… read full answer
One of the best student credit cards for building credit is the Capital One SavorOne Student Cash Rewards Credit Card because it accepts applicants with limited or no credit history, has a $0 annual fee, and gives good rewards. The Capital One SavorOne Student Card lets students earn 1 - 5% cash back on purchases, with bonus cash back on common spending categories such as dining, entertainment, groceries, and more. Additionally, your account information is relayed to the major credit bureaus every 30 to 45 days, like with all of Capital One’s credit cards.
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