Credit Cards for College Students

Getting a student credit card is highly recommended because it's the easiest, cheapest way to establish credit in your own name. That's important because your credit history is directly linked to the loan rates you’ll qualify for later in life as well as your job prospects and insurance premiums. And while being an authorized user on a parent’s card will help you build some credit, it won’t provide nearly the same benefit as having your own account.

Gaining experience using common financial products is also essential to becoming financially literate and avoiding serious mistakes down the road. “High school is a good time to introduce credit cards to students, especially if they get parental, school or church guidance,” says Dr. Debby Lindsey-Taliefero, an associate professor of economics at Howard University who studies financial literacy in urban areas. That said, if you don’t trust yourself to use a student credit card responsibly, just don’t use it. Even if you lock your card in a drawer right after opening it and never actually make any purchases with it, your credit will still improve, thanks to the fact that your credit card company will report your card as being in good standing on a monthly basis. If that’s the road you think you’ll wind up taking, we highly recommend getting a no annual fee student credit card in order to minimize costs.

Regardless of your age, you need a valid Social Security Number (SSN) and a mailing address that isn't a P.O. Box in order to get a college student credit card. [TIP: You can use your dorm's street address on a student credit card application; just note the mailbox number].

If you are under 21, you will need to indicate on your application that you have the income or assets (e.g. bank account balance, stocks, etc.) necessary to independently make the required monthly minimum payments on a new credit card (usually no more than $60). If you can’t do so, you’ll need a co-signer over the age of 21 who is willing to accept financial responsibility in the event that you don’t pay back what you charge.

Many folks are under the false impression that people under the age of 21 cannot access credit at all. That’s largely due to disparities between different versions of the Credit CARD Act of 2009 and misinformation being disseminated as a result. “Interestingly, every version of the Credit CARD Act of 2009 had strict protections for people under 21 (targeting college students), but the last version of the bill (the one actually enacted) weakened all those provisions, so it’s business as usual,” says Dr. Robert Scott, an associate professor of economics at Monmouth University. “People who only read the earlier versions of the bill assumed the protections for people under 21 were kept—but that is wrong. I followed the bill closely, since it’s my area of research and was shocked when I read the final version.”

While it’s smart to take advantage of 0% APR offers and rewards, your ultimate objective in using a student credit card is to never miss a single payment and avoid both finance charges and debt. That will help you build a good credit score, avoid getting into bad habits that will come back to haunt you, and save as much money as possible for when you enter the "real" world.

So set up automatic payment from a bank account (ACH) or set calendar reminders to pay your student credit card bill, and don’t let simply having a credit card lead you to spend more than normal.

1. Secured cards have the highest approval odds, offering the closest thing you can get to guaranteed approval from a credit card (you still need a co-signer or proof of income if you’re under 21, though)
2. Secured cards prevent you from overspending, typically allowing you to spend no more than the amount of your refundable security deposit.
3. Secured cards tend to be cheap, with a number of offers not charging annual fees.