College student credit cards are a great choice for students want to manage their own expenses and learn about credit and lending. Student credit card offers are designed specifically to suit a student’s lifestyle and needs while helping them develop the credit they will need to apply later for a different type of credit card or a loan. Students can also earn rewards by using student credit cards. A student credit card can be the first step towards financial responsibility down the line. Compare student credit cards to see which offer is the best for you.
How do student credit cards work?
Student credit cards are designed to work as a first credit card. In many ways, they are just like standard credit cards. The APR (annual percentage rate) on a college student credit card is comparable to the APR on a standard credit card, about 16% on average.
Lots of college student credit cards have introductory 0% APRs on purchases. As with all credit cards, you should carefully consider a 0% APR card before signing. Credit cards with 0% introductory APRs can sometimes have very high APRs down the line.
Credit limits on college student credit cards are usually pretty low. Lots of student credit cards start around $500, but you may be able to find a starting credit limit around $1000. You may also be able to raise the credit limit on your student credit card once you have proven yourself a reliable borrower.
The best student credit cards will also offer rewards. Many college student credit cards offer the same rewards as any other rewards card: 1% to 5% on most purchases, with 3% to 5% on food and gas. However, student credit cards may have additional rewards just for college students:
Cash Back for money spent on textbooks and school supplies
Rewards for money spent on music, movies, restaurants, etc.
Rewards for a high GPA and other academic achievements
Rewards for timely payments
Advantages of Student Credit Cards
College student credit cards are a great way for young people to learn about credit and financial planning. They are also a great way for students to handle their own expenses while they are away from home for the first time.
The best student credit cards account for the fact that most of their customers don’t have any kind of a credit score. Usually, you could have a lot of trouble trying to get a credit card without a credit score, and you might be stuck with a secured credit card. Secured credit cards are for people with bad credit scores. Secured credit cards have very high APRs, annual fees, and low credit limits.
With a student credit card, a student can still get a credit card with a low APR and no annual fee even though they don’t have a credit score.
And in addition, student credit card rewards are designed specifically to suit the needs of a student. This means that a student stands to save money when buying the items that they need, such as books or school supplies. In addition, student credit cards reward student spending on items of want rather than need (like movie and concert tickets, etc.) so that students can spend money on social activities and still save money.
Disadvantages of a Student Credit Card
Student credit cards can teach young people a lot about borrowing money. However, some of these lessons do not come easily or painlessly. Student credit cards carry the same responsibilities and consequences of standard credit cards, and if a young person isn’t mature enough to handle the responsibility of borrowing money, then a student credit card could end up getting them in trouble.
You should also be careful to avoid using a student credit card as an extra student loan. Credit card interest rates may be much higher than student loan interest rates, so you could end up paying a lot of extra money if you try to use a credit card as a student loan.