Congratulations on starting your college journey! As you navigate this new chapter in your life, you’ll have a lot of decisions to make, including how to pay for your education. One option that many students consider is getting a credit card.
A credit card can be a great way to build your credit history and earn rewards, but it’s important to choose the right card for your needs. If you’re a student, there are a few key things to keep in mind when choosing a credit card.
In this blog post, we’ll discuss the difference between student credit cards and regular credit cards. We’ll also cover the different types of student credit cards available, how to choose the right student credit card for you, and how to build credit with a student credit card.
What is a student credit card?
A student credit card is a credit card designed for students. These cards typically have lower interest rates and annual fees than regular credit cards, and they may also offer rewards, such as cashback or travel miles. In General, i would say student credit cards require no income stream to get Approved that is one of the important factors when getting a student credit card.
Student credit cards are a good option for students who are looking to build their credit history. When you use a credit card responsibly, you’re showing lenders that you’re a reliable borrower. This can help you qualify for better interest rates and terms on loans in the future.
What is a regular credit card?
A regular credit card is a credit card that is not specifically designed for students. These cards typically have higher interest rates and annual fees than student credit cards, but they may also offer more rewards.
Regular credit cards are a good option for students who have a good credit history and who are looking for a card with more rewards. However, it’s important to be aware of the higher interest rates and annual fees before you apply for a regular credit card.
What are the key differences between student credit cards and regular credit cards?
The key differences between student credit cards and regular credit cards are:
- Annual fee: Student credit cards typically have no annual fee, while regular credit cards may have an annual fee.
- APR: The APR (annual percentage rate) is the interest rate you pay on your credit card balance. Student credit cards typically have a higher APR than regular credit cards.
- Credit limit: Student credit cards typically have a lower credit limit than regular credit cards.
- Rewards: Student credit cards may offer rewards, such as cashback or travel miles, but these rewards are often less generous than the rewards offered by regular credit cards.
- Requirements: Student credit cards typically have less stringent requirements than regular credit cards. For example, student credit cards may not require a credit score, while regular credit cards may require a minimum credit score of 680 or higher.
Now Let’s compare these in columns to get an idea :
| Feature | Student Credit Card | Regular Credit Card |
|---|---|---|
| Annual fee | Typically no annual fee | May have an annual fee |
| APR | Typically higher APR than regular credit cards | May have a lower or higher APR than student credit cards |
| Credit limit | Typically lower credit limits than regular credit cards | May have a higher or lower credit limit than student credit cards |
| Rewards | May offer rewards, such as cashback or travel miles, but these rewards are often less generous than the rewards offered by regular credit cards | May offer more generous rewards, such as cashback or travel miles |
| Requirements | Typically have less stringent requirements than regular credit cards. For example, student credit cards may not require a credit score, while regular credit cards may require a minimum credit score of 680 or higher. | May have more stringent requirements than student credit cards |
Example of a student credit card:
- Discover it® Student Cash Back
- No annual fee
- 1% cash back on all purchases
- 5% cash back on rotating categories
- No credit score required
Example of a regular credit card:
- Chase Sapphire Preferred® Card
- Annual fee of $95
- 2x points on travel and dining
- 1 point per dollar on all other purchases
- Requires a minimum credit score of 750
My opinion:
I think student credit cards are a great option for students who are looking to build their credit history. They typically have lower interest rates and annual fees than regular credit cards, and they may also offer rewards. However, it’s important to use a student credit card responsibly and to pay your bill on time and in full each month.
If you have a good credit score, you may also be eligible for a regular credit card. Regular credit cards typically offer more rewards than student credit cards, but they also have higher interest rates and annual fees. It’s important to compare the different cards available to you and choose the one that best meets your needs.
How to choose the right student credit card for you?
When choosing a student credit card, there are a few things you’ll need to consider:
- Your credit score: If you have a good credit score, you’ll have more options available to you. However, even if you have a limited or no credit history, there are still student credit cards available to you.
- Your spending habits: Consider what you typically spend money on and choose a card that offers rewards in those categories. For example, if you eat out a lot, you might want to choose a card that offers cash back on dining.
- Your budget: Make sure you can afford the monthly payments and any annual fees.
- Your goals: Are you looking to build your credit history or earn rewards? Choose a card that aligns with your goals.
Do student credit cards have interest?
Yes, student credit cards can have an interest. The interest rate on a student credit card is typically higher than the interest rate on a regular credit card. This is because students are considered to be higher-risk borrowers.
However, there are some student credit cards that offer no interest, or a 0% introductory APR. This means that you won’t pay any interest on your balance for a certain period of time, typically 12 to 18 months.
It’s important to read the terms and conditions of any student credit card carefully before you apply. This will help you understand the interest rate, annual fee, and any other fees that may apply.
If you’re a student who is looking to build your credit history, it’s important to use a credit card responsibly. This means paying your bill on time and in full each month. If you carry a balance on your credit card, you’ll be charged interest.
To avoid paying interest on your student credit card, make sure to pay your bill in full each month. You can also try to find a student credit card with a 0% introductory APR. This will give you a chance to build your credit history without having to pay any interest.
How to build credit with a student credit card?
Here are some tips on how to build credit with a student credit card:
- Use your card responsibly. Pay your bill on time and in full each month.
- Keep your credit utilization low. Your credit utilization is the percentage of your credit limit that you’re using. Aim to keep your credit utilization below 30%.
- Don’t close your account after you graduate. Keeping your account open will help to build your credit history.
Can You Have Two Credit Cards?
Yes, you can have two credit cards as a student. In fact, having two credit cards can be a good way to build your credit history. When you have multiple credit cards, you can show lenders that you’re a responsible borrower who can manage multiple accounts. This can help you qualify for better interest rates and terms on loans in the future.
However, it’s important to use both credit cards responsibly. This means paying your bills on time and in full each month. If you don’t, you could damage your credit history and make it more difficult to get approved for loans in the future.
What is the average credit card limit for students?
The average credit card limit for students is around $1,000. However, this can vary depending on a number of factors, including the student’s credit history, income, and debt-to-income ratio.
Student credit cards are designed to help students build their credit history. They typically have lower interest rates and annual fees than regular credit cards. However, they also have lower credit limits. This is because students are considered to be a higher-risk borrowers.
If you’re a student who is looking for a credit card, it’s important to be aware of your credit limits. Don’t spend more than you can afford to pay off in full each month. Keeping your credit utilization low will help you build your credit history.
Conclusion:
A student credit card can be a great way to build your credit history and earn rewards. However, it’s important to choose the right card for your needs and to use it responsibly. By following the tips in this blog post, you can build a strong credit history and set yourself up for financial success in the future.