Starting your credit journey as a student can feel daunting. Building a solid credit history is crucial for future financial endeavors, such as renting an apartment, securing a loan, or even getting a good insurance rate. Luckily, there are credit cards designed specifically for students with little to no credit history, offering a pathway to responsible credit management. This guide explores the best options available in 2024 and provides the information you need to make an informed decision.
Here's a breakdown of some top contenders and what makes them suitable for students:
| Credit Card | Key Features | Why It's Good for Students |
|---|---|---|
| Discover it® Student Cash Back | Rotating 5% cash back categories (up to a quarterly maximum), unlimited 1% cash back on all other purchases, no annual fee, rewards match at the end of the first year. | Great for earning rewards on everyday purchases, especially if you can align your spending with the rotating categories. The first-year rewards match is a significant bonus. No annual fee makes it budget-friendly. |
| Discover it® Student Chrome | 2% cash back at gas stations and restaurants (up to $1,000 in combined purchases each quarter), unlimited 1% cash back on all other purchases, no annual fee, rewards match at the end of the first year. | Ideal if you spend a lot on gas and dining. The first-year rewards match and no annual fee are attractive features. |
| Capital One Quicksilver Student Cash Rewards Credit Card | Unlimited 1.5% cash back on every purchase, no annual fee, potential for credit line increase after 6 months of responsible use. | Simple and straightforward rewards structure, making it easy to understand and manage. The potential for a credit line increase encourages responsible credit behavior. |
| Journey Student Rewards from Capital One | 1% cash back on all purchases; earn 1.25% back every month you pay on time, no annual fee. | Rewards responsible payment behavior, encouraging students to pay their bills on time. No annual fee makes it accessible. |
| Petal® 1 "No Annual Fee" Visa® Credit Card | Designed for those with limited or no credit history, reports to all three major credit bureaus, cash back rewards on select purchases (depending on the cardholder's credit profile). | A good option if you've been denied other student cards. It uses alternative data to assess creditworthiness. Reports to all three major credit bureaus, helping you build credit quickly. |
| Deserve® EDU Mastercard for Students | Designed for international students studying in the US, 1% cashback on all purchases, no annual fee, Amazon Prime Student after spending $500 in the first 3 months. | Specifically caters to international students who may have difficulty obtaining credit cards in the US. Offers a valuable perk of Amazon Prime Student. |
| OpenSky® Secured Visa® Credit Card | Requires a security deposit (refundable), reports to all three major credit bureaus, no credit check required. | A great option for those with very limited or damaged credit history. The security deposit acts as your credit line. |
Detailed Explanations
Discover it® Student Cash Back: This card stands out for its rotating 5% cash back categories. Each quarter, Discover announces specific categories (like gas stations, grocery stores, or restaurants) where you'll earn 5% back on up to a certain spending limit. All other purchases earn 1% cash back. The real kicker is the first-year rewards match – Discover automatically matches all the cash back you've earned at the end of your first year, essentially doubling your rewards. There's no annual fee, making it a cost-effective option for students.
Discover it® Student Chrome: Similar to the Student Cash Back card, the Student Chrome offers a different rewards structure. You'll earn 2% cash back at gas stations and restaurants (up to $1,000 in combined purchases each quarter) and 1% cash back on all other purchases. Like the Student Cash Back, it features a first-year rewards match and no annual fee. This card is best for students who spend a significant portion of their budget on gas and dining.
Capital One Quicksilver Student Cash Rewards Credit Card: This card offers a simple and straightforward rewards program: unlimited 1.5% cash back on every purchase. There are no rotating categories to track, making it easy to understand and manage. Capital One may also offer a credit line increase after 6 months of responsible use, which can help you build your credit history faster. The absence of an annual fee further enhances its appeal.
Journey Student Rewards from Capital One: This card focuses on rewarding responsible payment behavior. You earn 1% cash back on all purchases. However, you'll earn 1.25% back every month you pay on time, effectively boosting your rewards for responsible credit management. This encourages students to prioritize timely payments. Like other student cards, it comes with no annual fee.
Petal® 1 "No Annual Fee" Visa® Credit Card: Petal cards are designed for individuals with limited or no credit history. Unlike traditional credit cards, Petal uses alternative data, such as your banking history, to assess your creditworthiness. This can be a lifesaver if you've been denied other student cards. It offers cash back rewards on select purchases, with the specific rewards structure depending on the cardholder's credit profile. Most importantly, it reports to all three major credit bureaus, helping you build your credit score.
Deserve® EDU Mastercard for Students: This card specifically targets international students studying in the United States. It can be difficult for international students to obtain credit cards in the US due to a lack of established credit history. Deserve EDU offers a solution. It provides 1% cashback on all purchases and waives the annual fee. As a bonus, it offers Amazon Prime Student after spending $500 in the first 3 months, a valuable perk for many students.
OpenSky® Secured Visa® Credit Card: A secured credit card requires a security deposit, which acts as your credit line. For example, if you deposit $200, your credit limit will be $200. The OpenSky® Secured Visa® Credit Card is a good option for those with very limited or damaged credit history, as it doesn't require a credit check. It reports to all three major credit bureaus, allowing you to build or rebuild your credit. The security deposit is refundable when you close the account (provided you've paid your balance).
Frequently Asked Questions
What is a credit card for students with no credit? It's a credit card designed for students who haven't established a credit history, often with features like lower credit limits and rewards programs that encourage responsible usage.
Why should I get a credit card as a student? Building credit early can help you qualify for better interest rates on loans, rent an apartment, and obtain favorable insurance rates in the future.
What credit score is needed for a student credit card? Many student credit cards are designed for applicants with limited or no credit history, so a traditional credit score may not be necessary.
What are the key features to look for in a student credit card? Look for no annual fee, rewards programs (cash back or points), and features that encourage responsible credit management, like credit line increases for on-time payments.
Will applying for a credit card affect my credit score? A hard inquiry on your credit report will occur when you apply for a credit card, which can slightly lower your credit score, but responsible use and on-time payments will outweigh this impact in the long run.
What if I can't get approved for a student credit card? Consider a secured credit card, where you provide a security deposit that acts as your credit line, or ask a parent or guardian to add you as an authorized user on their credit card.
How can I use my credit card responsibly? Pay your bills on time and in full each month, keep your credit utilization low (ideally below 30%), and avoid spending more than you can afford to repay.
What's the difference between a secured and unsecured credit card? A secured credit card requires a security deposit, while an unsecured credit card doesn't. Secured cards are often easier to obtain for those with limited or no credit.
Can international students get credit cards in the US? Yes, some credit cards, like the Deserve® EDU Mastercard for Students, are specifically designed for international students studying in the US.
How often should I check my credit report? You should check your credit report at least once a year to ensure accuracy and identify any potential errors or fraudulent activity.
Conclusion
Choosing the right credit card as a student with no credit is a significant step towards building a solid financial future. Carefully consider your spending habits and financial goals to select a card that aligns with your needs and encourages responsible credit management. By using your credit card wisely, you can establish a positive credit history and set yourself up for long-term financial success.