Choosing a student credit can be an important step toward building your financial future. If you're new to credit and looking to establish your creditworthiness, it can be challenging to figure out what you want in a credit card – are you looking to earn points on your purchases? Are budgeting tools an important feature? This guide will walk you through the steps to choosing the right student card for you.
What is a student credit card?
Student credit cards are specifically designed for college students who are new to credit and looking to build their credit history. These cards typically come with lower credit limits and may offer benefits tailored to students, such as cash back on purchases like textbooks or dining. Since many students have limited or no credit history, these cards often have more lenient approval requirements, though applicants may need to be enrolled in a full- or part-time education program.
What to look for in a student credit card
Many credit card issuers offer cards specifically designed for students with little or no credit history. These cards often come with perks like the ability to earn points, low fees and tools to help you manage your finances. When choosing a student credit card, consider the following key features:
- No annual fees: Credit cards with annual fees can be worth it sometimes, especially when they come with valuable perks. However, it’s typically best to choose a card with no annual fee for your first card, especially as a student. A card with no annual fee can let you focus on building credit without having to handle extra expenses.
- Low APR: Look for cards with a low APR, which can help minimize interest costs if you carry a balance. This is especially important for students who might not be able to pay off their balance in full each month.
- Credit-building tools: Look for cards that offer credit monitoring, alerts and educational resources, which can be helpful as you learn to manage and build your credit.
- Rewards program: Consider cards that allow you to earn points, cash back or miles on everyday purchases, such as groceries or textbooks. These rewards can help you make the most of your spending.
- Student-friendly features: Some cards offer benefits tailored to students, like tools that help you manage your budget and track your spending. These features can help you navigate your finances and college life.
Deciding on the best student credit cards for you
Once you’ve identified your needs and the features that matter most, it's time to compare student credit cards. Look at the interest rates, fees and rewards programs each card offers. Consider which card best aligns with your spending habits and long-term financial goals.
Applying for a student credit card
After selecting the right student credit card you want, the next step is to apply. Be prepared to provide information about your income and expenses. This information helps the credit card issuer assess your ability to manage and repay any balances. Here is a checklist of what you may be asked for when applying for a student credit card:
- Legal name: Ensure you provide your full legal name.
- Social Security number or Individual Taxpayer Identification Number: This is necessary for the credit card issuer to check your credit history and verify your identity.
- Date of birth: This helps card issuers confirm your identity.
- Residential address: Provide a valid address where you currently live. You can use a permanent address, such as your parents’ address, because your school address is more likely to change.
- Proof of enrollment: Some student credit cards require proof that you are enrolled in a full-time or part-time educational program. This could be a student ID or an enrollment verification letter from your school.
- Income information: While students often have limited income, you may need to provide information about any part-time jobs, allowances or financial aid you receive to show you can make payments. If you’re 21 or older, you can include any household income you have access to, such as from a parent or spouse.
- Contact information: You’ll usually be asked to include a phone number and email address where the issuer can reach you regarding your application and account management.
Tips for using your student credit card to build credit
Once approved, it's important to use your card wisely . Use the tools that come with your student card to manage your credit effectively. Here are some other tips for building credit and using your card responsibly:
- Pay on time: Always make your payments on time, as late payments can negatively impact your creditworthiness.
- Keep balances manageable: Keep your credit card balances low to maintain a healthy credit utilization ratio. This ratio reflects the amount of credit you’re using compared to your total credit limit and plays a key role in your overall credit health.
- Monitor your credit: Regularly check your credit report to track your progress and ensure there are no errors or issues.
- Set up autopay: Consider setting up autopay to ensure you never miss a payment, which can help you build and maintain a strong credit history.
Alternatives to student credit cards
If a student credit card doesn’t seem like the right fit for you, there are alternative options to consider that can still help you build credit and manage your finances:
- Secured credit cards: A secured credit card requires a security deposit, typically equal to your credit limit. This can be a great option to build credit if you have limited credit history.
- Authorized user: Becoming an authorized user on a parent’s credit card can allow you to benefit from their positive credit use. While you won’t be the primary cardholder, this can help you build credit if the account is managed responsibly. Just make sure the card issuer reports authorized users to the major credit bureaus.
Disclosure: This article is for educational purposes. It is not intended to provide legal, investment, or financial advice and is not a substitute for professional advice. It does not indicate the availability of any Citi product or service. For advice about your specific circumstances, you should consult a qualified professional.
