It’s a time of endless possibilities, newfound independence and, for many, the first taste of financial freedom. But with all the excitement there often comes a new set of challenges to face, including managing money wisely.
One of the most important financial tools for many students is a credit card. Used wisely, a credit card can help your child build a credit history, establish financial responsibility and earn rewards on purchases.
With so many student credit cards on the market, it’s important to choose one that’s right for your family. Here are a few things to consider:
- Low Interest Rate: Look for a credit card with a low annual percentage rate (APR), especially if you expect to carry a balance.
- Rewards: Some cards offer cash back, travel points and other rewards for purchases.
- Annual Fees: For new college students, we recommend credit cards with no annual fees.
- Low or No Foreign Transaction Fees: If your child plans to travel or study abroad, it’s important that their credit card charges low or no foreign transaction fees.
- Low Credit Limit: When you open your child’s credit card, we recommend starting with a lower limit and increasing it as your child demonstrates responsibility.
Top 4 Credit Cards for Students*
1. Discover it® Student Cash Back: Discover student credit cards are meant to give your student the opportunity to build a credit history and earn cash back rewards on purchases.
- 5% cash back on select categories.Rewards for maintaining good grades.
- No annual fee.
- No travel protection.
- Requires a social security number to apply, so it may not work for some international students.
2. Capital One Student Credit Cards: Capital One offers two credit cards for students: SavorOne Rewards for Students and Quicksilver Rewards for Students. These cards encourage responsible spending by offering rewards for timely payments.
- Cash back on all purchases.
- No foreign transaction fees.
- No annual fee.
- Other student credit cards offer greater cash back rewards.
3. Bank of America® Cash Rewards for Students: This card may be a good fit for students who want to earn cash rewards for their everyday purchases.
- 3% cash back in the category of your choice.
- $200 online cash rewards bonus for new cardholders.
- No annual fee.
- Limits on cash back categories (you can only make changes once a month).
- 3% foreign transaction fee.
- Must spend at least $1,000 within 90 days to receive introductory bonus.
4. Citi Rewards+℠ Student Card: A card that ensures students get the most out of every purchase.
- Rounds up points for all purchases.
- Bonus points for groceries and gas.
- Foreign transaction fees.
- Spending caps on rewards.
- Tips for First-Time Cardholders
Here are some tips to help your students ace their first credit card experience:
- Budget Wisely: Set a budget before letting your child use the card. Divide spending into categories like food, fun, books and necessities. This will help you and your child track expenses and avoid overspending.
- Pay the Card in Full: Work together to clear the balance every month to avoid interest charges and stay within the budget. Carrying a balance may lead to debt that’s more difficult to manage later.
- Understand Your Card’s Details: Read the credit card’s terms and conditions, including interest rates, fees and benefits. This will help you avoid surprises.
- Check Your Statements Together: Review your credit card statements regularly to catch any unauthorized charges or mistakes. Report any discrepancies to your card issuer promptly.
Getting a credit card isn’t just about chasing tempting perks—it’s about being smart and savvy with money. As students juggle classes, exams and social life, the right credit card can help teach them money management skills and set them up for a financially stable future.
* National Debt Relief has no affiliation with any of the referenced credit cards or companies and does not receive any compensation from these organizations. The opinions expressed in this article are those of the author and may not reflect the views of National Debt Relief. This is not an endorsement of a particular product or service. Products may not be suitable for all consumers.